Conseco Units Rtd A+,Colonial,Am Travellr Off S&PWatch.

NEW YORK--(BUSINESS WIRE)--Nov. 5, 1997--Standard & Poor's CreditWire 11/5/97 -- Standard & Poor's today raised its claims-paying ability and counterparty credit ratings on the following Conseco group of life insurance company members to single-`A'-plus:

-- American Life & Casualty Insurance Co. (from single-`A'-minus),

-- American Travellers Life Insurance Co. (from triple-`B'-plus), and

-- Colonial Penn Life Insurance Co. (from single-`A').

The rating on Colonial Penn has been removed from CreditWatch, where it was placed May 2, 1997.

At the same time, Standard & Poor's assigned its single-`A'-plus claims-paying ability and counterparty credit ratings to the following Conseco group of life insurance company members:

-- Bankers Life & Casualty Co.,

-- Beneficial Standard Life Insurance Co.,

-- Capitol American Life Insurance Co.,

-- Connecticut National Life Insurance Co.,

-- Conseco Life Insurance Co. of NY (formerly known as American

Accident & Health Insurance Co.),

-- Great American Reserve Insurance Co.,

-- Lamar Life Insurance Co.,

-- Manhattan National Life Insurance Co.,

-- Massachusetts General Life Insurance Co.,

-- Philadelphia Life Insurance Co., and

-- Pioneer Life Insurance Co.

All of these companies are viewed as strategically integral components of Conseco, and have been rated in a group context.

Additionally, Standard & Poor's raised its rating on $78 million subordinated debt originally issued by American Travellers Corp., which is now an obligation of Conseco Inc., to triple-`B'-minus from double-`B'-minus. The counterparty credit rating of American Travellers was subsequently withdrawn. All ratings were removed from CreditWatch, where they were placed Sept. 4, 1996.

Standard & Poor's affirmed its triple-`B' senior debt and corporate credit ratings on Conseco Inc., as well as its triple-`B'-minus preferred stock and 'A-2' commercial paper ratings. The ratings reflect the following:

-- Conseco's good business review. With over $5 billion in collected premiums during 1996, the company is one of the largest in the life insurance industry, and maintains a leading market share position with many of its product offerings. With its recent acquisition activity, the company has evolved away from being primarily a fixed annuity writer, with the 1996 premium volume derived primarily from individual life insurance (18% of total collected premiums), Medicare supplement (17%), long-term care (11%), and fixed annuities (28%). Excluding annuity sales, new premiums overall are expected to increase 6% during 1997.

-- The company has a track record of producing very strong earnings. According to Standard & Poor's earnings adequacy model, in 1996 the company produced a superior earnings adequacy ratio of over 400%, reflective of the expense efficiencies Conseco continues to recognize through its consolidation activities and its pricing discipline. As health care products become a larger portion of the business mix, Conseco will be challenged to maintain such a high level of earnings, although profitability is expected to remain strong.

-- The quality of Conseco's investment portfolio is good. The $20.1 billion portfolio is comprised primarily of investment grade, nonmortgage backed securities (60% of total invested assets), mortgage-backed securities (27%), and non-investment-grade debt (5%). There is no significant exposure to unaffiliated equities, mortgages, or real estate.

-- According to Standard & Poor's capital adequacy model, the Conseco group's capitalization is excellent, with a capital adequacy ratio of 152%. Conseco Inc.'s debt to capital is expected to rise to 35% by the end of 1997, with preferred securities to capital being 12%, and fixed charge coverage of 4.9 times. While the operating companies' excellent capitalization and the good financial leverage at the holding company are tempered by the fact that goodwill equates to approximately 89% of the company's equity, they remain supportive of the ratings.

-- Conseco's management is clearly committed to maximizing shareholder value. While Standard & Poor's believes that the company will continue to be a leader in the consolidation of the life insurance industry, management has recently shifted its attention to focus more on the operations of its insurance units, in terms of melding the various operations and distribution channels, and in terms of generating more growth internally. While Standard & Poor's believes management will ultimately be successful in its efforts to distill its current 34 insurance companies to approximately 14 within the next 18 months, the company will inevitably face challenges as it assimilates its various businesses and attempts to efficiently harness its various distribution channels. With respect to future acquisition activity, given that the company has reached its publicly stated 35% debt to capital limitation, management will be challenged to fund future acquisitions in a manner that continues to maximize shareholder value while not exceeding its current level of financial leverage.

OUTLOOK: STABLE

Standard & Poor's anticipates that Conseco's earnings will remain superior, debt to capital will not exceed 35%, and the insurance group's capitalization will remain excellent. -- CreditWire -0-

OUTSTANDING RATINGS RAISED
                                              Rating
                                            To      From
American Life & Casualty Insurance Co.
  Claims-paying ability                     A+       A-
  Counterparty credit rating                A+       A-

American Travellers Life Insurance Co.
  Claims-paying ability                     A+       BBB+
  Counterparty credit rating                A+       BBB+

OUTSTANDING RATINGS RAISED AND REMOVED FROM CREDITWATCH
                                              Rating
                                            To      From
American Travellers Corp.
  Subordinated debt                         BBB-     BB-

Colonial Penn Life Insurance Co.
  Claims-paying ability                     A+       A
  Counterparty credit rating                A+       A

OUTSTANDING RATINGS AFFIRMED
                                            Rating
Conseco Inc.
  Senior debt                               BBB
  Corporate credit rating                   BBB
  Preferred stock                           BBB-
  Commercial paper                          A-2

ASSIGNED `A+' CPA AND COUNTERPARTY CREDIT RATINGS

Bankers Life & Casualty Co.
Beneficial Standard Life Insurance Co.
Capitol American Life Insurance Co.
Connecticut National Life Insurance Co.
Conseco Life Insurance Co. of NY
Great American Reserve Insurance Co.
Lamar Life Insurance Co.
Manhattan National Life Insurance Co.
Massachusetts General Life Insurance Co.
Philadelphia Life Insurance Co.
Pioneer Life Insurance Co.

OUTSTANDING RATING WITHDRAWN
                                              Rating
                                            To      From
American Travellers Corp.
  Counterparty credit rating                NR       BB+

CONTACT: Jon Reichert, New York, 212/208-1775

Mark Puccia, New York, 212/208-1901

Copyright 1997, Standard & Poor's Rating Services

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