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NEW FITCH STUDY RANKS BOND INSURERS FOR FIRST TIME -- FITCH FINANCIAL WIRE --

 NEW FITCH STUDY RANKS BOND INSURERS FOR FIRST TIME
 -- FITCH FINANCIAL WIRE --
 NEW YORK, April 23 /PRNewswire/ -- A new Fitch report, "Bond Insurers' Bonanza" which is being published next week, ranks industry participants for the first time. The report compares ten monoline bond insurers and reinsurers based on more than a dozen key indicators, including profitability, underwriting, operating efficiency, risk leverage, dividend payout, and others.
 The report also describes the banner year enjoyed by the financial guaranty industry in 1991. Bond insurers produced record volume, improved profitability, attracted new capital, and operated more efficiently. A staggering $71 billion of debt was insured, up 37 percent from 1990's $52 billion. Return on equity (ROE) jumped 100 basis points to 13.2 percent. Qualified capital soared 18 percent to $3.7 billion. Risk leverage, the relationship between net exposure and capital, rose modestly to 135:1 from 133:1, as strong earnings and $190 million of capital infusions offset a 19% surge in net exposure, which topped the $500 billion mark. However, premium rates remained flat, limiting future profitability growth. Also, some insurers continued to pay large dividends, hampering the accumulation of capital and diluting insured bondholder protection.
 MBIA ranks first in most measures of operating performance. Over the last four years, MBIA has outperformed the competition in terms of statutory returns, operating efficiency, and the combined ratio, an insurance underwriting yardstick. Over the same period, FGIC's average ROE of 15.8 percent was more than 150 basis points higher than the nearest competitor. Also, FGIC has been the leader in terms of internally generating and retaining capital and, along with CapMAC, has exhibited the most conservative trends in leverage and exposure growth.
 The report identifies potential growth areas for bond insurers, including the municipal secondary market, structured financings, and international credit enhancements. However, in addition to the opportunities provided, each sector also poses risks, requiring a disciplined and prudent approach on the part of the bond insurers.
 -0- 4/23/92
 /CONTACT: Mark H.S. Cohen, 212-908-0512 or Brady N. Tournillon, 212-908-0519, both of Fitch/ CO: ST: IN: FIN SU: ECO


SM -- NY036 -- 1729 04/23/92 10:03 EDT
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Publication:PR Newswire
Date:Apr 23, 1992
Words:359
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