A.M. Best Raises Rating of American Bankers Insurance Company of Florida From 'A-' -Excellent- to 'A' -Excellent-.

OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 19, 1998--A.M. Best Co. today raised the rating of American Bankers Insurance Company of Florida - the lead property/casualty company of American Bankers Insurance Group, Inc. (ABIG) - to "A" (Excellent) from "A-" (Excellent).

A.M. Best also raised the ratings of two life affiliates, Voyager Life Insurance Co. and Voyager Life & Health Insurance Co., to "B++" (Very Good) from "B+" (Very Good) and assigned an initial letter rating of "A-" (Excellent) to Caribbean American Property Insurance Co., a property/casualty operating subsidiary.

The rating of American Bankers Insurance Company of Florida was raised to reflect its continued strong operating profitability, moderated earnings exposure to certain run-off business risks, as well as its sustained strong market profile despite the business disruptions caused by the prospect of a merger. The action was independent of the beneficial impact of the pre-tax $400 million breakup fee paid to ABIG from Cendant Corp. to release Cendant from all merger-related obligations.

The raised ratings of the two Voyager Life companies and rating assignments to Caribbean American Property reflect the subsidiaries' solid operating earnings, strong capitalization and strategic affiliation with ABIG.

ABIG's stable operating results demonstrate its underwriting expertise and leading market position in its niche insurance credit segment. Furthermore, core underwriting results are aided by the group's large spread of risks and relatively low policy limits. Although the ownership uncertainty caused by ABIG's proposed merger with Cendant slowed its new business generation this year, its continued premium growth is indicative of the group's strong relationships with its distribution sources. These distribution channels include leading commercial banks, consumer finance companies, mortgage bankers and retail institutions, as well as their captive affiliates.

In addition, the breakup fee allows ABIG to pay down the $100 million in additional debt it incurred to pay a breakup fee to former bidder, American International Group. This decreases the group's financial leverage and improves its financial flexibility.

ABIG is an insurance holding company that operates as an international specialty wholesaler and marketer of insurance products through its insurance subsidiaries. Its products include credit life, credit property, unemployment, accident and health, homeowners, physical damage, livestock, individual and group life coverages.

A.M. Best affirmed the ratings of the following operating subsidiaries: American Bankers Life Assurance Company of Florida, Bankers American Life Assurance Co., and Caribbean American Life Assurance Co., at "A" (Excellent); and American Reliable Insurance Co., Voyager Indemnity Insurance Co. and Voyager Property Casualty Insurance Co. at "A-" (Excellent).

A.M. Best also affirmed the ratings of the MS Diversified Corp., as follows MS Casualty Insurance Co., at "A-" (Excellent), MS Life Insurance Co., at "B++" (Very Good), and MS Diversified Life Insurance Co. and Life Insurance Company of Mississippi, at Financial Performance Ratings of 5 (Good). On May 18, ABIG announced its intent to purchase MS Diversified in order to enter the extended vehicle service market. The transaction closed on Oct. 29, 1998.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.