Printer Friendly

1992 BEST'S RATINGS ASSIGNED TO 223 COMPANIES INCLUDING 15 LARGE INSURERS

 1992 BEST'S RATINGS ASSIGNED TO 223 COMPANIES
 INCLUDING 15 LARGE INSURERS
 OLDWICK, N.J., May 18 /PRNewswire/ -- A.M. Best Company today released the 1992 Best's Ratings for 223 insurance companies, including six large property/casualty insurers and nine large life/health insurers.
 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 472 property/casualty and 301 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 15 large insurance entities:
 Alfa Insurance Group, Montgomery, Ala., 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 applies to the five property/casualty members of the group.
 The group's consolidated results continued to generate superior operational profitability. An operating ratio of 85 and strong realized and unrealized capital gains produced a 23 percent increase in policyholders' surplus. Alfa Insurance Group's balance sheet liquidity is outstanding with approximately $300 million in cash and short-term unaffiliated investments. Operating leverage is conservative with $416 million in net writings supported by $629 million in surplus.
 Despite the group's personal lines concentration in only one state, Alabama, its extraordinary balance sheet strength and reinsurance protection enable the group to withstand claims from substantial catastrophic events. Furthermore, Alabama has a favorable regulatory environment with no problematic residual insurance market or regulatory statutes.
 Alfa Insurance Group is the second largest underwriter of personal lines insurance in Alabama and has $971 million in assets.
 Allstate Insurance Group, Northbrook, Ill., was assigned a 1992 Best's Rating of "A" (Excellent). The group's financial strength was downgraded from superior to excellent, and its rating level was downgraded from "Contingent A+" to "A." The "A" rating was assigned to Allstate Insurance Company and its seven affiliated property/casualty companies that reinsure all of their business with Allstate Insurance Company.
 The group continues to maintain a leadership position in the personal lines market and operates with a conservative operating strategy, high quality investment portfolio and adequate liquidity which is enhanced by strong cash flows. However, the company's financial strength and operating performance has been moderated in recent years by continued poor underwriting performance on current business and the emergence of claims from prior years' loss reserves.
 Allstate Insurance Group reported a 15 percent increase in policyholders' surplus in 1991, principally from unrealized capital gains and a reduction in dividends to its parent, Sears, Roebuck and Co. This surplus growth improved the group's leverage measures with $14.6 billion in direct writings, supported by $5.4 billion in policyholders' surplus, however, leverage measures remain high relative to its peers. The group maintains adequate liquidity with $1.4 billion of funds provided from 1991 operations.
 Allstate Insurance Group is the second leading property/casualty underwriter in the United States. The group principally writes personal lines insurance and has $23.8 billion in assets.
 Automobile Club of Michigan, Dearborn, Mich., was assigned a 1992 Best's Rating of "A-" (Excellent). The property/casualty group's excellent financial strength was affirmed, and its rating level of "A-" was unchanged. The companies of the group assigned this rating were Auto Club Insurance Association, Auto Club Group Insurance Company and Castle Insurance Company.
 The group's profitability improved with a 1991 combined ratio of 105.8 which led to a 9 percent increase in policyholders surplus to $426 million. This improvement reflected lower adverse loss reserve development on prior accident years in the group's personal automobile line. The group's operating leverage is comparable to industry norms and peers, but significant reinsurance recoverables are due from the deficit-run Michigan Catastrophic Claims Association. The group maintains a very favorable liquidity position with approximately $750 million in cash and short-term investments. The Automobile Club of Michigan is the 47th largest property/casualty company in the United States and has $1.6 billion in assets.
 Connecticut Mutual Life Insurance Company, Hartford, Conn., 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 the company's well-managed distribution system, its strengthened profitability in recent years, favorable capitalization and strong liquidity. Since 1990, Connecticut Mutual has de-emphasized the marketing of guaranteed interest contracts (GICs) and focused its operations in the individual life line (its principal business segment) and group disability markets.
 Although the company has experienced capital losses from its mortgage and real estate portfolios, these write-downs have been offset by improved operating earnings performance, resulting in a 35 percent increase in surplus funds over the last two years. A.M. Best anticipates that future real estate losses will not materially impact Connecticut Mutual's earnings performance or surplus growth. The company's liquidity position is supported by over $4.6 billion of investment-grade bonds, cash and short-term securities. Connecticut Mutual ranks among the 30 largest life/health insurers in the United States when measured by total assets.
 Due to their strategic marketing roles as subsidiaries of Connecticut Mutual Life, C.M. Life Insurance Company and GroupAmerica Insurance Company, both of Hartford, Conn., were assigned 1992 Best's Ratings of "A+" (Superior). Both companies' superior financial strength was affirmed, and their rating levels of "A+" were unchanged. These ratings are based on the consolidated performance of the parent and the subsidiaries.
 ITT Hartford Insurance Group (property/casualty), Hartford, Conn., was
assigned a 1992 Best's Rating of "A+" (Superior). The group's superior financial strength was affirmed, and its rating level of "A+" was unchanged. The rating applies to the group's 16 property/casualty inter-company pool members.
 The pool, led by Hartford Fire Insurance Company, continues to produce superior levels of profitability and combined with capital gains has increased policyholders' surplus by 30 percent over the last five years with premium volume remaining approximately unchanged at $5.6 billion.
 The group operates with conservative leverage relative to its peers. It has $5.6 billion in writings supported by $3.1 million in surplus. A strong and conservative balance sheet is maintained with $2.1 billion in cash and short-term investments and is enhanced with $575 million in operating cash flow in 1991. The group has no material junk bonds, real estate or mortgage exposure.
 ITT Hartford Insurance Group is the ninth largest property/casualty underwriter in the United States, principally writing personal lines business with $15.6 billion in assets.
 John Hancock Mutual Life Insurance Company, Boston, 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 John Hancock's excellent market position, its consistently improving profitability and favorable capitalization. Through its subsidiaries, the company has earned a leadership position in the group pension and traditional life lines of business.
 Although John Hancock maintains a significant exposure in the mortgage markets, the performance of the portfolio has consistently improved over the last five years due to its changing risk profile, property type and geographic diversification, sophisticated monitoring structure and prudent underwriting. Since the close of 1986, surplus funds have increased 57 percent due to favorable profitability. A.M. Best expects the company's strong surplus base and improving operational profitability to absorb the impact of its future real estate related losses.
 To supplement its strong liquidity position, John Hancock maintains a $1 billion bank line of credit in addition to $16.5 billion of liquid public and private placement securities, cash and short-term investments. The company ranks among the top 15 life/health insurers in the United States when measured by total assets.
 John Hancock Variable Life Insurance Company, Boston, was assigned a 1992 Best's Rating of "A++." The company's financial strength was upgraded from excellent to superior, and its rating level was upgraded from "A" to "A++." This rating action reflects the company's status as a principal subsidiary of John Hancock Mutual, and its strategic role as a marketer of variable life products.
 Liberty Mutual Insurance Group (property/casualty), Boston, was assigned a 1992 Best's Rating of "A-" (Excellent). The group's excellent financial strength was affirmed, and its "A-" rating level was unchanged. The rating applies to the group's five inter-company and reinsured pool members. In addition, Liberty Northwest Insurance Corporation was assigned an "A-" based on its own merit.
 Led by Liberty Mutual Insurance Company, the pool continues to produce excellent operating income results supported by strong net investment income. Policyholders' surplus has increased over 23 percent since 1987, while net premiums written have stabilized at approximately $6 billion.
 The group has progressively managed its principal line, workers' compensation, by providing both underwriting capacity and building its fee-based servicing carrier capabilities. Depending upon the market characteristics of each state, the group emphasizes either underwriting or servicing capabilities. In recent years, the group's profitability has improved by focusing on large deductible and self-insured plans as well as improving loss experience in its voluntary business segment. Liberty Mutual Group is the largest writer of workers' compensation insurance in the United States and has $18.8 billion in assets.
 Massachusetts Mutual Life Insurance Company, Springfield, Mass., 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 operating strategy, strong and improving statutory earnings performance, its excellent capitalization and favorable liquidity. The company maintains a prominent market position in individual life insurance and a profitable presence in the group life and health and pension sectors.
 Although Massachusetts Mutual Life has experienced capital losses from its bond portfolio and commercial mortgage holdings, write-downs in these areas have been more than offset by the company's strong profitability. During 1991, after-tax operating profits increased 40 percent up to $178.5 million. A.M. Best anticipates that capital losses in the commercial mortgage portfolio will continue over the near term, however, A.M. Best does not expect that investment losses will materially impact the company's earnings performance or strong capitalization.
 The liquidity position of the company is supported by significant operating cash flow and over $14 billion of investment-grade bonds, cash and short-term securities held at year-end 1991. Massachusetts Mutual Life ranks among the 15 largest life/health insurers in the United States when measured by admitted assets.
 Due to their strategic roles as subsidiaries of Massachusetts Mutual Life, MML Pension Insurance Company, Wilmington, Del., and MML Bay State Life Insurance Company, Jefferson, Mo., were assigned 1992 Best's Ratings of "A++" (Superior). These ratings are based on the consolidated performance of the parent and the subsidiaries.
 New England Mutual Life Insurance Company, Boston, was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level was changed from "Contingent A+" to "A+."
 This rating action reflects the company's strong position in the professional individual insurance market, an increasing level of statutory net income, declining exposure to guaranteed interest contracts (GICs), and good capitalization. A significant portion of The New England's investment portfolio is managed to generate capital gains as well as current yield. Over the past several years, the company has realized a considerable level of capital gains from the real estate portfolio which have more than offset recent real estate related write- downs. Although the company maintains a significant exposure in the real estate market, capital losses, which increased during 1991, have been manageable.
 During the past five years, surplus funds have remained relatively stable, however, The New England maintains significant unrealized value in its investment management subsidiaries and aggregate real estate holdings. The company's liquidity position was supported by over $4.3 billion in investment-grade bonds, cash and short-term securities at year end 1991. New England Mutual ranks among the 20 largest life/health insurers in the United States when measured by total assets.
 Due to its strategic role as a subsidiary of New England Mutual Life, New England Variable Life Insurance Company, Wilmington, Del., was assigned a 1992 Best's Rating of "A+" (Superior). The company's superior financial strength was affirmed, and its rating level was changed from "Contingent A+" to "A+." This rating is based on the consolidated performance of the parent and the subsidiary.
 Pacific Mutual Life Insurance Company, Newport Beach, Calif., 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 the company's improved statutory earnings performance and capitalization, its strong liquidity and expertise in asset management. Although Pacific Mutual has experienced capital losses in its bond, mortgage and real estate portfolios, surplus funds have increased 59 percent the last five years due to statutory operating profits of $155.1 million.
 A.M. Best does not anticipate future asset write-downs will materially impact earnings performance or surplus growth. The company maintains a liquid investment position with over $5.7 billion in investment-grade bonds and short-term securities held at year end.
 In April 1992, Pacific Mutual's bid to acquire all in-force business and manage First Capital Life Insurance Company was endorsed by the California Insurance Department. At year-end 1991, Pacific Mutual ranked among the top 30 life/health insurers in the United States when measured by total assets.
 Due to its strategic marketing role as a subsidiary of Pacific Mutual Life, PM Group Life Insurance Company, Phoenix, Ariz., was assigned a 1992 Best's Rating of "A+" (Superior). This rating is based on the consolidated performance of the parent and the subsidiary.
 Principal Mutual Life Insurance Company, Des Moines, Iowa, 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 prominent market position in the pension and group health sectors, strong earnings performance in recent years, favorable capitalization and excellent liquidity. Principal Mutual Life maintains a significant diversification in products, customers, distribution systems and geographical locations. Although Principal Mutual's exposure to mortgage loans is significant, the performance of the portfolio has been above average. Capital losses tied to commercial real estate have been relatively modest and have been more than offset by the company's strong profitability. Over the past five years, surplus funds have increased 126 percent due to after-tax statutory profits totalling $851 million.
 A.M. Best anticipates that future investment losses will not materially impact earnings performance or surplus growth. Principal Mutual Life maintains a considerable degree of liquidity with strong operating cash flow and over $10.3 billion in investment-grade bonds, cash and short securities held at year-end 1991. Principal Mutual ranks among the top 15 life/health insurers in the United States when measured by total assets.
 Due to its strategic role as a subsidiary of Principal Mutual Life, Principal National Life Insurance Company, Des Moines, Iowa, 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++." This rating is based on the consolidated performance of the parent and the subsidiary.
 Protection Mutual Insurance Company, Park Ridge, Ill., was assigned a 1992 Best's Rating of "A+" (Superior). The property/casualty company's superior financial strength was affirmed, and its "A+" rating level was unchanged.
 The company continued to generate superior levels of profitability, recording a 1991 operating ratio of 84 which led to a 15 percent increase in policyholders' surplus. The company maintains a strong and liquid balance sheet with over $140 million in cash and short-term investments. Operating leverage measures are conservative with $207 million in net premiums written supported by $316 million in policyholders' surplus.
 Recent media reports grossly overstated Protection Mutual's exposure to the April 13, 1992, Chicago flood. The company estimates a modest net cost, after reinsurance, of $12.5 million for seven insured buildings inside the Chicago Loop. Claims arising from the flood will moderately impact the company's 1992 financial results.
 The Prudential Insurance Company of America, Newark, N.J., 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 leadership position in its major lines of business, its diversified operations, consistent and substantial earnings performance, strong capitalization and favorable liquidity. Despite capital losses in its bond and real estate portfolios during 1991, the company recorded an after-tax statutory operating profit of $851.7 million, a 7 percent increase from 1990, and increased surplus funds 21 percent to $6.5 billion. The surplus increase reflects strong earnings in The Prudential's individual insurance, group insurance and asset management business.
 A.M. Best anticipates that future fixed income and real estate related write-downs will not materially impact the company's strong earnings performance or surplus growth. The Prudential is the largest life/health insurance company in the United States when measured by admitted assets.
 Due to their strategic roles as subsidiaries of The Prudential Insurance Company of America, Pruco Life Insurance Company of New Jersey, Newark, N.J., and Pruco Life Insurance Company, Phoenix, Ariz., were assigned 1992 Best's Ratings of "A++" (Superior). These ratings are based on the consolidated performance of the parent and the subsidiaries.
 State Mutual Life Assurance Company of America, Worcester, Mass., 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 the company's improved profitability in recent years, generally conservative investment practices, strengthened capitalization and favorable liquidity. The rating also recognizes State Mutual's significant investment in Hanover Insurance Company, a publicly traded property/casualty insurer.
 Although State Mutual Life has experienced increased delinquencies and foreclosures in its mortgage portfolio due to the current real estate recession, capital losses in this area have been manageable. Over the last five years, surplus funds have more than doubled due to statutory earnings of $232.5 million. State Mutual Life's liquidity position is strong with nearly $3 billion in investment-grade bonds, cash and short-term securities held at year-end 1991. The company ranks among the top 45 life/health insurers in the United States when measured by total assets.
 Due to its strategic marketing role as a subsidiary of State Mutual Life, SMA Life Assurance Company, Worcester, Mass., 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+." This rating is based on the consolidated financial results of the parent and the subsidiary.
 Teachers Insurance and Annuity Association of America (TIAA), New York, 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 leadership position in the higher education pension market, its superior capitalization, favorable earnings performance and stable liability structure. TIAA maintains a significant investment concentration in mortgages and real estate. However, in view of the fact that over 90 percent of the company's liabilities are not surrenderable, recent capital losses tied to the downturn in the real estate market have been very manageable. TIAA's liability structure permits the company to accept a greater degree of credit risk without a significant concern about the risk of disintermediation.
 Over the past five years, the company's capitalization has nearly tripled due to statutory operating profits, realized investment gains and a significant reduction in TIAA's conservative divided liability reserve during 1991. Due to its stable liability structure, the company's need for liquidity is very modest and is serviced by its sizable annual cash flow. TIAA, together with its companion organization, the College Retirement Equities Fund (CREF), is the largest retirement system in the United States.
 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 the company's A.M. Best identification number.
 -0- 5/18/92
 /CONTACT: Christina Stein of A.M. Best, 908-439-2200, ext. 5642/ CO: A.M. Best Company ST: New Jersey IN: INS SU: ECO


CK -- NY024 -- 1224 05/18/92 10:31 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 18, 1992
Words:3434
Previous Article:CARL MARKS & CO., INC. ANNOUNCES FORMATION OF NEW FINANCIAL AND MANAGEMENT CONSULTING GROUP
Next Article:AMERICAN PHYSICIANS SERVICE GROUP ANNOUNCES RESULTS OF OPERATIONS FOR FIRST QUARTER OF 1992
Topics:


Related Articles
A.M. BEST PLANS TO RELEASE 1992 BEST'S RATINGS
1992 BEST'S RATINGS ASSIGNED TO 142 COMPANIES INCLUDING TWO LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 221 COMPANIES INCLUDING EIGHT LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 156 COMPANIES INCLUDING SEVEN LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 304 COMPANIES INCLUDING 11 LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 380 COMPANIES INCLUDING 23 LARGE INSURERS
REVIEW OF 1992 BEST'S RATINGS
CHUBB, GEICO AND UNUM LIFE AFFIRMED BY A.M. BEST
LIFE/HEALTH RATING UPGRADES OUTNUMBER DOWNGRADES FOR FIRST TIME IN TWO YEARS
A.M. BEST RELEASES RATINGS FOR JAPANESE, AUSTRALIAN INSURERS

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters