Fitch Ratings Affs Provident Mutual's 'AA' Rtg; Removes Rtg Watch Pos.Business Editors CHICAGO--(BUSINESS WIRE)--July 18, 2002 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed the 'AA' insurer financial strength rating of Provident Mutual Life Insurance Company (Provident Mutual), and removed it from Rating Watch Positive pending its sponsored demutualization Demutualization The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation. Notes: This means mutual/life insurance companies convert from policyholder companies to stock companies. and acquisition by Nationwide Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. (NFS (Network File System) The file sharing protocol in a Unix network. This de facto Unix standard, which is widely known as a "distributed file system," was developed by Sun. See file sharing protocol and WebNFS. NFS - Network File System ). The Rating Outlook is Stable. Provident Mutual's current rating is consistent with its strategic importance in both the combined NFS/Provident Mutual operation and the overall Nationwide organization, including affiliated property/casualty and asset management businesses, following the acquisition. The company's current rating also considers integration risks generally associated with such transactions, including disruption in daily company operations, potential loss of distribution and/or management talent, and the possibility that synergies may not be realized. Fitch recognizes that NFS' integration plan focuses on offering additional NFS products through Provident's career and PPGA (Plastic PGA) See PGA. PPGA - Plastic Pin Grid Array distribution channels. Integration and consolidation will mainly occur in ancillary lines of business and certain staff office functions. Fitch believes the sponsored demutualization offers strategic opportunities for the joined NFS/Provident Mutual operation. The potential benefits of the transaction include added market share in variable life products, access to Provident Mutual's career agency force and captive broker/dealer, and Provident Mutual's underlying profitability. Balanced against the above-mentioned positives are the current market pressures the industry is experiencing in variable products. NFS is a holding company whose primary operating subsidiaries are Nationwide Life Insurance Company and Nationwide Life & Annuity Insurance Company. Nationwide Mutual Insurance Company Nationwide Mutual Insurance Company & Affiliated Companies is a group of large U.S. insurance and financial services companies based in Columbus, Ohio. History Beginnings as Farm Bureau Mutual is one of the largest property/casualty companies in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , and is the ultimate parent of NFS. Although not wholly owned, Fitch considers NFS to be a strategic operation for Nationwide Mutual, and does not anticipate Nationwide Mutual relinquishing control of NFS. Fitch currently rates Nationwide Mutual's financial strength 'AA'. Entity/Issue/Type Action Rating/Outlook Provident Mutual Life Insurance Co. --Insurer financial strength Affirm/Remove from RW 'AA'/Stable. |
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