S&P Affirms St Paul Cos & Rltd Units Rtgs; Otlk Stb.Business Editors & Analysts NEW YORK--(BUSINESS WIRE)--Feb. 23, 2000 Standard & Poor's today affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its ratings on St. Paul St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery Cos. Inc., the members of the St. Paul Fire & Marine Insurance Co. Intercompany Pool (SPIP SPIP Système de Publication pour l'internet Participatif SPIP Software Process Improvement Plan SPIP Station Program Implementation Plan SPIP Solid Propulsion Integrity Program (NASA) SPIP System Performance Improvement Plan ), and related entities (see list). The outlook is stable. SPIP is the fourth largest underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. of commercial insurance risks in the U.S. and one of the few U.S. property/casualty companies with an international presence. SPIP, like many of its peers, has been hurt by the soft market in commercial lines. However, even during its acquisition of USF&G Corp. (USF&G), it managed to maintain a stable presence in the market for both agents and insureds, which Standard & Poor's believes demonstrates management's conservative underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and reserving practices. Profitability and capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. remain cornerstones of the rating. Profitability reflects improved underwriting results, strong and fairly predictable investment results, and a conservatively managed loss reserve position, which Standard & Poor's believes is among the industry's most stable. SPIP's combined ratio improved to 108% in 1999 versus 1998's ratio of 119% unadjusted (113% adjusted for nonrecurring restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the USF&G acquisition). Similarly, capitalization, as measured by Standard & Poor's capital adequacy model, has improved considerably since the acquisition of USF&G. The improvement in SPIP's capital adequacy primarily reflects stronger earnings and lower capital charges from the sale of the standard and nonstandard non·stan·dard adj. 1. Varying from or not adhering to the standard: nonstandard lengths of board. 2. personal insurance businesses to MetLife Auto & Home and Prudential Insurance Co. of America, respectively, in 1999. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma capital adequacy is about 190% versus 142% at the close of the acquisition. Separate but related, the ratings on Fidelity & Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. Life Insurance Co. and Thomas Jefferson Life Insurance Co. are explicitly guaranteed by St. Paul Fire & Marine Insurance Co. (SPFM SPFM Society of Priests for A Free Ministry ). St. Paul Cos. Inc. and the members of the St. Paul Fire & Marine Insurance Co. Intercompany Pool are Security Circle insurers, which means that they voluntarily underwent Standard & Poor's most comprehensive analysis and were assigned ratings in one of the top four categories for financial security. OUTLOOK: STABLE The stable outlook reflects Standard & Poor's expectations that capital adequacy of the property/casualty operations should remain strong (above 175%), with the primary decrease coming from the increased dividends needed to finance the parent's share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program or potential acquisitions. Similarly, financial leverage at the parent, which is currently 18%, is expected to stay in the 15% to 25% range. The company's expense ratio is expected to improve gradually to somewhere between 32% and 33% by 2002 from a high of 35% in 1999. The improvement is expected to stem from cost reductions related to the acquisition of USF&G and the sale of personal lines. Management has met and exceeded its targeted goal of achieving $200 million in expense savings. Premium volumes are expected to remain flat for 2000, Standard & Poor's said. ---CreditWire OUTSTANDING RATINGS AFFIRMED St. Paul Cos. Inc. Counterparty credit rating A+/Stable Senior debt A+ Commercial paper A-1 St. Paul Capital LLC Preferred stock *A- *Guaranteed by St. Paul Cos. Inc. USF&G Corp. Counterparty credit rating A+/Stable Senior debt A+ Subordinated debt A USF&G Capital I USF&G Capital II USF&G Capital III Preferred stock *A- *Guaranteed by USF&G Corp. St. Paul Insurance Co. of IL St. Paul Lloyd's Northbrook National Insurance Co. St. Paul Reinsurance Co. Ltd. St. Paul International Insurance Co. Ltd. United States Fidelity & Guaranty Co. Counterparty credit rating AA/Stable Financial strength rating AA Fidelity & Guaranty Life Insurance Co. Thomas Jefferson Life Insurance Co. Financial strength rating AA THE ST. PAUL FIRE & MARINE INSURANCE CO. INTERCOMPANY POOL MEMBERS: St. Paul Fire & Marine Insurance Co. St. Paul Surplus Lines Insurance Co. St. Paul Medical Liability Insurance Co. Athena Assurance Co. Northbrook Indemnity Co.Northbrook Property and Casualty Insurance Co. St. Paul Fire & Casualty Insurance Co. (The) St. Paul Guardian Insurance Co. (The) St. Paul Indemnity Insurance Co. St. Paul Insurance Co. (The) St. Paul Insurance Co. of ND St. Paul Mercury Insurance Co. St. Paul Property & Casualty Insurance Co. Counterparty credit rating AA/Stable Financial strength rating AA |
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