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1992 BEST'S RATINGS ASSIGNED TO 204 COMPANIES INCLUDING 12 PROMINENT INSURERS

 1992 BEST'S RATINGS ASSIGNED TO 204 COMPANIES
 INCLUDING 12 PROMINENT INSURERS
 OLDWICK, N.J., June 1 /PRNewswire/ -- A.M. Best Company today released the 1992 Best's Ratings for 204 insurance companies, including Aetna Life Insurance and Annuity Company, Aetna Life Insurance Company, Allstate Life Insurance Company, American Hardware Mutual Group, Crusader Insurance Company, Erie Insurance Group, Farmers Insurance Group, First Colony Life Insurance Company, IDS Life Insurance Company, Kentucky Central Life Insurance Company, Lincoln National Life Insurance Company and Northwestern National Life Insurance Company.
 Based on the evaluation of year-end 1991 financial results and subsequent relevant events, 1992 Best's Ratings will be released on a weekly basis through June. To date, ratings have been released for 735 property/casualty and 463 life/health insurers. Best's ratings are continuously monitored throughout the year with formal rating reviews performed on annual, six-month and nine-month financial results.
 Brief rating rationales are presented below for the 12 insurance entities mentioned above.
 Aetna Life Insurance and Annuity Company (ALIAC), Hartford, Conn. was assigned a 1992 Best's Rating of "A++" (Superior). The company's superior financial strength was affirmed, and its rating level was raised from "A+" to "A++."
 This rating assignment reflects ALIAC's superior asset-liability profile, favorable capitalization, improving profitability, strong market identification and management expertise. Over the last three years, the parent company has contributed $77 million to support the company's operations. ALIAC maintains a favorable liquidity position as operating cash flow, investment-grade bonds and short-term holdings totaled $8.6 billion at year-end 1991. ALIAC ranks among the 25 largest life/health insurers in the United States when measured by total assets.
 Aetna Life Insurance Company, Hartford, was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level of "A+" was unchanged.
 This rating assignment reflects Aetna Life's continued favorable profitability and improved capitalization. The earnings capacity of the in-force business, maintenance of a highly liquid bond portfolio and access to capital markets have enabled the company to manage the impact of the significant downturn in the real estate markets. In addition, approximately 35 percent of Aetna Life's mortgage loan investments support experience rated products. A.M. Best expects investment losses from the commercial mortgage portfolio to continue, however, its strong profitability, favorable liability structure, maintenance of mortgage reserves and access to additional capital should allow the company to maintain an adequate level of capitalization.
 Aetna Life maintains a favorable liquidity position, as investment- grade bonds, cash and short-term holdings totaled $14.8 billion at year- end 1991. Aetna Life ranks among the five largest life/health insurers in the United States when measured by total assets.
 Allstate Life Insurance Company, Northbrook, Ill. was assigned a 1992 Best's Rating of "A++" (Superior). The company's superior financial strength was affirmed, and its rating level was raised from "A+" to "A++."
 This rating assignment reflects Allstate Life's strong and diverse distribution channels, favorable earnings performance and excellent liquidity and capitalization. Although Allstate Life has increased its investment in commercial mortgages in recent years, the company's investment losses have been modest and its overall exposure to real estate is manageable.
 A.M. Best does not expect that future investment losses will materially impact the company's profitability or capitalization. Allstate Life's liquidity is supported by substantial operating cash flow and over $11.3 billion of investment-grade bonds, cash and short-term securities held at year-end 1991. The company ranks among the 20 largest life/health insurers in the United States when measured by total assets.
 Due to their strategic roles as subsidiaries of Allstate Life, Allstate Life Insurance Company of New York, Huntington Station, N.Y., Glenbrook Life Insurance Company, Northbrook, Ill., Lincoln Benefit Life Insurance Company, Lincoln, Neb., Northbrook Life Insurance Company, Northbrook, and Surety Life Insurance Company, Salt Lake City, were assigned 1992 Best's Ratings of "A++" (Superior). The ratings of Glenbrook Life, Lincoln Benefit Life, Northbrook Life and Surety Life reflect the fact that substantially all business written by these companies is reinsured with Allstate Life Insurance Company. The rating of Allstate Life of New York reflects the fact that it serves as a New York marketing arm of Allstate Life. All of the subsidiary ratings are based on the consolidated performance of the parent and the subsidiaries.
 American Hardware Mutual Group, Minneapolis, was assigned a 1992 Best's Rating of "NA-5" (Significant Change). The group's rating was changed from "Contingent A" (Excellent). This rating applies to the group's two property/casualty members, American Hardware Mutual Insurance Company and American Merchants Casualty Company.
 Underwriting losses due to significant reserve strengthening as well as past premium growth at inadequate rates contributed to a 37 percent decline in policyholders' surplus in 1991. Under the direction of a new president and CEO, the group is undergoing a significant operational restructuring that began in mid-1991 and is continuing into 1992. The new management team has implemented a number of corrective underwriting and expense reduction actions designed to return the group to profitability. The major changes are: the complete withdrawal from the states of Louisiana, South Carolina and Texas; consolidation of operations by closing various branch and regional offices; a major reduction in staff; withdrawal and non-renewal of certain troublesome lines of business; and reunderwriting the ongoing book of business. Management expects operating results to stabilize in 1992 and return to profitability in 1993, at which time the group's rating will be reevaluated.
 The American Hardware Mutual Group is a writer of commercial property/casualty insurance with $331 million in assets.
 Crusader Insurance Company, Los Angeles, was assigned a 1992 Best's Rating of "Qualified A-" (Excellent). The company's financial strength was affirmed, and its rating level of "A-" was unchanged. This rating affirmation follows a two-week suspension of the company's Best's Rating on May 18, 1992 due to the uncertainty surrounding the financial impact of the Los Angeles riots.
 The approximate net cost to the company of 340 riot-related claims, after reinsurance and applicable tax loss carryback, will be $10 million. On March 31, 1992, the company had $18.7 million in surplus. Unico American Corporation, Crusader's parent, plans to contribute capital to the company, as needed, to maintain a minimum surplus position of $15 million. In addition, Crusader has doubled its catastrophe reinsurance protection to minimize the impact of future "shock-loss" recurrences. This capital commitment and additional reinsurance will enable the company to maintain excellent balance sheet liquidity and a conservative leverage position to support its direct writings which amounted to $21.2 million for 1991.
 Crusader Insurance Company is a commercial property/casualty writer in California with $47 million in assets.
 Erie Insurance Group (property/casualty), Erie, Pa. was assigned a 1992 Best's Rating of "A++" (Superior). The property/casualty group's superior financial strength was affirmed, and its rating level was raised from "A+" to "A++." This rating applies to the group's two members, Erie Insurance Exchange and Erie Insurance Company.
 The group has increased policyholders' surplus 41 percent over the past five years to more than $1.0 billion due to capital gains on its stock portfolio and strong net operating earnings. Erie Insurance Group continues to generate excellent profitability with a five-year average combined ratio of 99. It operates with very conservative leverage and maintains excellent liquidity that is enhanced by approximately $300 million in positive cash flows, and invested assets exceeded net liabilities by 40 percent.
 Erie Insurance Group is the 39th largest property/casualty group in the United States. It is the third largest personal lines writer in Pennsylvania and operates in eight other states.
 Farmers Insurance Group (property/casualty), Los Angeles, was assigned a 1992 Best's Rating of "Qualified A" (Excellent). The property/casualty group's financial strength was affirmed, and its rating level of "A" was unchanged. The rating applies to the group's nine inter-company pool members and four other companies that are fully reinsured by pool members. The remaining member of the group, Farmers Texas County Mutual Insurance Company, was assigned a 1992 Best's Rating of "A-" (Excellent) based on its own performance. The company's excellent financial strength was affirmed, and its rating level was lowered from "A" to "A-."
 The group continued to generate growth in policyholders' surplus, which has increased 35 percent over the last five years to $2.2 billion. However, the growth in surplus has been largely attributable to realized capital investment gains as the group's operations have been break-even with a five-year average operating ratio of 102. Farmers Insurance Group's operating leverage has slowly increased in recent years with direct writings amounting to $7.4 billion, but it remains adequate. A sound liquidity position is maintained with $9.7 billion in invested assets, comprised of predominantly investment-grade bonds and "blue chip" equities, and is further enhanced by strong cash flows in excess of $500 million a year. Strong loss reserves are maintained.
 Farmers Insurance Group is the country's fourth largest property/casualty writer, specializing in personal lines with $11.7 billion in assets.
 First Colony Life Insurance Company, Lynchburg, Va. was assigned a 1992 Best's Rating of "A++" (Superior). The company's superior financial strength was affirmed, and its rating level was raised from "A+" to "A++."
 This rating assignment reflects the company's conservative investment practices, favorable profitability, excellent liquidity and strong capitalization. First Colony Life has considerable expertise and maintains a competitive position in the structured settlement annuity marketplace. In addition, the company has expanded its operation in the individual life and single premium deferred annuity areas.
 Over the last five years, capital and surplus funds have increased 73 percent due to statutory operating profits and realized investment gains. First Colony's liquidity is excellent with investment-grade bonds, cash and short-term holdings comprising more than 80 percent of invested assets at the close of 1991. First Colony Life ranks among the 60 largest life insurers in the United States when measured by admitted assets.
 A subsidiary of First Colony Life, American Mayflower Life Insurance Company, New York, was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level of "A+" was unchanged. American Mayflower Life primarily markets single premium deferred annuities, structured settlement annuities and individual life insurance in the state of New York where First Colony Life is not licensed as a direct writer.
 IDS Life Insurance Company, Minneapolis, was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level of "A+" was unchanged.
 This rating assignment reflects IDS Life's strong distribution system, above average liquidity position, consistently improving profitability and favorable level of capitalization. Although IDS Life maintains an exposure to below-investment-grade bonds, the company has demonstrated its ability to manage through the downturn in this marketplace due to its extensive investment expertise.
 Premium volume has more than doubled over the past five years due to increased annuity sales. Strong operating fundamentals -- expense control, high persistency, favorable mortality and spread management -- have enabled earnings to improve in each of the past five years.
 The company maintains a favorable liquidity position as investment- grade bonds and short-term holdings totalled $11.3 billion at year-end 1991. In recent years, no extraordinary dividends have been paid by IDS Life to American Express, the ultimate parent concern. The management of the company does not expect this policy to change. IDS Life ranks among the 15 largest life/health insurers in the United States when measured by total assets.
 Due to its strategic role as a New York domiciled subsidiary of IDS Life, IDS Life Insurance Company of New York, Albany, N.Y. was assigned a 1992 Best's Rating of "A+" (Superior). The company's financial strength was upgraded from excellent to superior, and its rating level was upgraded from "A" to "A+." In addition, American Enterprise Life Insurance Company, Indianapolis, was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level of "A+" was unchanged. These ratings are based on the consolidated performance of the parent and the subsidiaries.
 Kentucky Central Life Insurance Company, Lexington, Ky. was assigned a 1992 Best's Rating of "B+" (Very Good). The company's financial strength was downgraded from excellent to very good, and its rating level was downgraded from "Contingent A-" to "B+." The company had been placed on Best's Rating Watch List on Jan. 6, 1992.
 This rating action reflects the increased level of under-performance in the mortgage portfolio during 1991. However, to mitigate the impact of future under-performance and write-downs in its mortgage holdings, the company has allocated $40 million from surplus as mortgage loan and real estate valuation reserves. Based on the information provided, A.M. Best anticipates this reserve will be adequate to offset future investment losses. Kentucky Central maintains an adequate surplus position in relation to its insurance and investment exposure.
 Lincoln National Life Insurance Company, Fort Wayne, Ind. was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level of "A+" was unchanged.
 This rating assignment reflects Lincoln National's favorable earnings and capitalization, excellent liquidity and its prominent position in the individual life, annuity reinsurance markets. Due to the general economic downturn, the mortgage portfolio has weakened in recent years. Although A.M. Best expects future commercial real estate related losses to continue, the diversity of the portfolio, the company's investment management expertise, the maintenance of a $108 million mortgage reserve and the earnings performance of its in-force business provide Lincoln National with a distinct advantage in managing theses losses. As a result, A.M. Best does not expect future investment write-downs to materially impact profitability and capitalization.
 Lincoln National is addressing regulatory uncertainty, thinning margins and increased competition in the reinsurance markets. In addition, by disposing of its capital intensive product lines, such as the employee benefits division, the company is concentrating its operations in its more profitable core lines. Lincoln National ranks among the 15 largest life/health insurers in the United States when measured by total assets.
 Due to its strategic role as a New York domiciled subsidiary of Lincoln National Life, Lincoln Security of New York, Brewster, N.Y. was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level of "A+" was unchanged. This rating is based on the consolidated performance of the parent and the subsidiary.
 Northwestern National Life Insurance Company, Minneapolis, was assigned a 1992 Best's Rating of "A" (Excellent). The company's financial strength was downgraded from superior to excellent, and its rating level was downgraded from "Contingent A+" to "A."
 This rating acknowledges Northwestern National Life's well- established position in the individual and group life markets, its favorable operating earnings performance and reasonable capitalization. However, this rating action reflects the magnitude of bond and real estate related investment losses experienced by the company which, when coupled with the establishment of investment reserves, have offset statutory earnings in recent years.
 The company maintains a reduced but ongoing exposure to below- investment-grade bonds and the commercial real estate market. A.M. Best believes that these balance sheet exposures are manageable and does not expect future investment losses to materially impact earnings performance or weaken capitalization. Northwestern National Life maintains a good liquidity position with nearly $1.7 billion of investment-grade bonds, cash and short-term securities held at year-end 1991. The company ranks among the 65 largest life/health insurers in the United States when measured by total assets.
 Northern Life Insurance Company, Seattle, a subsidiary of Northwestern National Life, was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level of "A+" was unchanged. In addition, the North Atlantic Life Insurance Company of New York, Jericho, N.Y. was assigned a 1992 Best's Rating of "A" (Excellent). The company's excellent financial strength was affirmed, and its rating level of "A" was unchanged. North Atlantic Life operates as a wholly owned subsidiary of Northwestern National Life.
 A.M. Best rates and reports on virtually all property/casualty and life/health insurers operating in the United States. Best's Ratings reflect A.M. Best's current opinion of insurers' financial strength and ability to meet policyholders' obligations.
 The 1992 Best's Ratings are made available to subscribers and the public as soon as they are assigned, flowing through A.M. Best's publications and its telephone ratings service, BestLine, 900-420-0400. BestLine costs $2.50 per minute and access requires a touch-tone telephone and the company's A.M. Best identification number.
 -0- 6/1/92
 /CONTACT: Christina Stein of A.M. Best Company, 908-439-2200, ext. 5642/ CO: A.M. Best Company ST: New Jersey IN: INS SU: ECO


TS -- NY017 -- 5539 06/01/92 09:26 EDT
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