A.M. Best Rates Protective Life Corp. Senior Debt.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--March 23, 2000

A.M. Best Co. has assigned an "a+" rating to senior unsecured notes issued by Protective Life Corp. and affirmed the ratings on the company's existing debt securities. The sale was made under Protective's previously announced $500 million shelf registration with the Securities and Exchange Commission. The financial strength ratings of Protective's life/health and property/casualty insurance subsidiaries remain unchanged.

The proceeds of the $125 million issue will primarily be used to retire outstanding bank debt. A.M. Best expects total borrowings (debt plus preferred stock, including FELINE PRIDES), as a percent of total capital, to remain at approximately 25-30% in the near to medium term. Also, A.M. Best anticipates Protective's capitalization to remain fairly constant, and takes into consideration that the company actively acquires blocks of business and insurance companies, and has established a separate division for this purpose.

Protective's ratings are based on its diverse sources of earnings and strong operating performance in all business lines. This consistent profitability is a result of the company's well-managed growth strategy, driven by an effective management team. Protective continues to enhance operating efficiency through use of advanced technology, a decentralized organizational structure and a diversified network of non-captive distribution channels to market its products. A.M. Best also notes the company's effective asset/liability duration matching that demonstrates its risk management capabilities.

Protective uses a conservative approach toward asset/liability duration matching and has instituted significant call and surrender provisions in almost all of its contracts, thereby strengthening its earnings sustainability. A.M. Best also notes the company's moderate financial leverage and believes future earnings will provide strong debt service coverage. The maturity of the company's primary businesses--in their respective product life cycles--generates seasoned profit margins, which further support stable earnings.

Offsetting these strengths is Protective's lack of scale in most businesses. However, this is largely mitigated by the company's effective use of technology, which allows it to maintain a low-cost administrative structure. In addition, the company's statutory capitalization (statutory surplus to total assets) is below the average of its peer group due to its history of sales growth primarily being in general account products that require a significant outlay of capital.

At the end of 1999, approximately half of Protective's invested assets were in mortgage-related investments. A.M. Best believes the prepayment risks inherent in these interest-sensitive investments expose the company to earnings volatility; however, the company's prudent underwriting strategy and refined asset/liability management procedures have thus far mitigated this volatility.

Protective Life Corp. is a diversified financial-services holding company headquartered in Birmingham, Ala. The company's subsidiaries market life, dental and credit insurance as well as retirement savings and investment products through independent agents, insurance brokers, stockbrokers, financial institutions, automobile dealers and direct response channels. As of Dec. 31, 1999, the company reported assets of approximately $13.0 billion and share-owners' equity of $865 million.

The following new debt security rating was assigned:

- Protective Life Corp.--senior debt rating of "a+".

The following shelf ratings are unchanged:

- Protective Life Corp.--senior debt rating of "a+";

subordinated debt rating of "a"; preferred stock rating of "a".

- PLC Capital Trust III--preferred stock rating of "a".

- PLC Capital Trust IV--preferred stock rating of "a".

The following existing debt ratings were affirmed:

- Protective Life Corp.--senior debt rating of "a+".

- PLC Capital Trust I--preferred stock rating of "a".

- PLC Capital Trust II--preferred stock rating of "a".

The A+ (Superior) financial strength rating of the following members of Protective Life Corp. is unchanged:

- Protective Life Insurance Co.

- West Coast Life Insurance Co.

- Protective Life and Annuity Insurance Co.

- Empire General Life Assurance Corp.

The A (Excellent) financial strength rating of Wisconsin National Life Insurance Co. is unchanged.

The A- (Excellent) financial strength rating of the following members of Protective Life Corp. is unchanged:

- Western Diversified Life Insurance Co.

- Western Diversified Casualty Insurance Co.

- United Dental Care of Texas, Inc.

- Denticare, Inc. (Florida)

- United Dental Care of Arizona, Inc.

- Kansas City Dental Care, Inc.

- UDC Ohio, Inc.

- Denticare of Oklahoma, Inc.

- United Dental Care of Missouri, Inc.

- Protective Dental Care, Inc. (Wisconsin)

- Lyndon Property Insurance Co.

- Lyndon Life Insurance Co.

- Gulfco Life Insurance Co.

- Acceleration Life Insurance Co.

The B++ (Very Good) financial strength rating of the following members of Protective Life Corp. is unchanged:

- International Dental Plans, Inc. (Florida)

- United Dental Care of New Mexico, Inc.

- United Dental Care of Washington, Inc.

- UDC of Michigan, Inc.

- United Dental Care of Utah, Inc.

- Parliament Dental Plans, Inc. (Texas)

- United Dental Care of Nebraska, Inc.

- Denticare, Inc. (Kentucky)

- United Dental Care of Pennsylvania, Inc.

- Denticare of Arkansas, Inc.

- United Dental Care of Indiana, Inc.

- UDC Dental California, Inc.

- United Dental Care Insurance Co.

- UDC Life and Health Insurance Co.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.