Printer Friendly

1992 BEST'S RATINGS ASSIGNED TO 293 PROPERTY/CASUALTY COMPANIES INCLUDING 23 LARGE INSURERS

 1992 BEST'S RATINGS ASSIGNED TO 293 PROPERTY/CASUALTY COMPANIES
 INCLUDING 23 LARGE INSURERS
 OLDWICK, N.J., July 6 /PRNewswire/ -- A.M. Best Company today released the 1992 Best's Ratings for 293 property/casualty insurance companies, including 23 large insurers.
 Under a separate release, A.M. Best assigned 1992 Best's Ratings to 346 life/health insurers, including nine large companies.
 Based on the evaluation of year-end 1991 financial results and subsequent relevant events, 1992 Best's Ratings will be released through Tuesday, July 7. To date, ratings have been released for 2,071 property/casualty insurers and 1,397 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 23 large property/casualty insurers.
 American Family Group (property/casualty), Madison, Wis., 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. This rating applies to the group's two members, American Family Mutual Insurance Company and American Standard Insurance Company.
 Despite an unusually high level of catastrophe losses for the second year in a row, the group's surplus increased more than 19 percent in 1991 from improved operating earnings and substantial investment gains. Overall profitability has been solid with a five-year operating ratio of 96. The group maintained prudent leverage with $2 billion in net writings supported by $972 million of surplus and favorable liquidity measures that are enhanced by continued strong cash flows.
 The American Family Group, a multi-line insurer principally writing personal lines in the Midwest, is one of the 25 largest property/casualty groups in the United States and has $3.1 billion in assets.
 American Re-Insurance Company, (part of the Aetna Life and Casualty Group), Princeton, N.J. 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. On June 8, 1992, the company announced that its parent, Aetna Life and Casualty Co. had signed a definitive agreement with Kohlberg, Kravis, Roberts and Co. to sell the company later this year in a management-led buyout for approximately $1.4 billion. The rating affirmation was based upon a review of the details of the transaction, the financing involved, the company's ability to service the debt and resulting balance sheet strength.
 The company continued to produce outstanding operating results with a five-year operating ratio of 80. The group's underwriting results continue to be strong, with a combined ratio of 103 in 1991, largely from the performance of its predominant excess casualty line. In the last five years, surplus has grown 82 percent from consistent operating earnings, approximately 45 percent of which were paid as dividends to its parent. This surplus growth has improved operating leverage, which remains high relative to its peers, with $894 million in net writings supported by $736 million in surplus.
 The company's high leverage is offset by strong loss reserves and on-going loss reserve protection measures undertaken, including the purchase of significant stop loss reinsurance protection. Balance sheet liquidity is adequate with $320 million of cash and short-term investments.
 American Re-Insurance Company, which is the third largest professional reinsurer in the country, has assets of $3.6 billion. The company is a direct writer of treaty and facultative reinsurance, predominantly writing excess casualty coverages.
 The Atlantic Mutual Companies, New York, N.Y. 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 "A+" to "A." The rating applies to the group's two inter-company pool members and an affiliate that reinsures with the pool. In addition, the Atlantic Reinsurance Company was assigned an "A- " based on its own results.
 The pool, led by Atlantic Mutual Insurance Company, produced negative operating income and an operating ratio of 105 in 1991 as a result of higher loss experience in its dominant commercial lines which have been adversely affected by increased price competition and continued assessments from involuntary workers' compensation pools. Nevertheless, surplus increased 4 percent in 1991 from large realized capital gains. Leverage measures remain high despite conservative growth in writings in recent years. The group maintains satisfactory liquidity with $100 million of cash and short-term investments enhanced by strong operating cash flows. The company's high quality and well- diversified investment portfolio is largely comprised of U.S. Government bonds.
 Atlantic Mutual Companies is the 60th largest property/casualty underwriter in the United States and has more than $1.5 billion in assets.
 Berkshire Hathaway Insurance Group, Omaha, Neb. was assigned a 1992 Best's Rating of "A++" (Superior). The group's superior financial strength was affirmed, and its rating level was raised from "A+" to "A++." The rating applies to nine members of the group.
 The group, led by National Indemnity Company, continued to produce exceptionally strong operating results with an average five-year operating ratio of 77. On a five-year basis, surplus more than tripled to $8.7 billion from strong operating income and over $5 billion in investment gains, most of which were generated from substantial appreciation in the group's stock portfolio that is concentrated in a number of high quality issues. Overall liquidity is extraordinary with operating cash flow of $0.5 billion in 1991. In the last two years, premium volume tripled as National Indemnity Company opportunistically expanded its writings of finite-risk reinsurance, a form of financial reinsurance. Despite this unusual growth, the group's operating leverage and capitalization, with $855 million in net writings supported by $8.7 billion in surplus, is second to none in the property/casualty industry. Most of the group's remaining companies, which provide traditional insurance, principally casualty coverages for commercial accounts, have exhibited consistent profitability, strong liquidity and cash flows, and extraordinary capitalization.
 Berkshire Hathaway Insurance Group is among the 50 largest property/casualty insurers in the United States and has $11.8 billion in assets.
 CIGNA Group (property/casualty), Philadelphia, Pa. was assigned a 1992 Best's Rating of "A-" (Excellent). The group's excellent financial strength was affirmed, and its rating level was lowered from "Contingent A" to "A-." The rating applies to 17 inter-company pool members and four affiliates that either reinsure with or receive the rating of a parent that is a pool member.
 The consolidated pool, led by The Insurance Company of North America, has produced unfavorable underwriting results with an average combined ratio of 118 over the last three years. The pool's underwriting results have been affected by deteriorating workers' compensation loss experience including substantial assessments from residual markets, continued price competition within its commercial lines and unfavorable reserve development from prior years on its liability lines. Surplus increased 20 percent in 1991 to $1.7 billion from substantial investment gains. Operating leverage improved in 1991, as the pool reduced its net writings 15 percent as part of an on-going restructuring to focus on its core commercial businesses. This restructuring included substantially withdrawing from the personal automobile market, streamlining operations, and shifting workers compensation coverages from guaranteed cost to loss sensitive policies. However, the group's leverage remains high relative to its peers with significant reinsurance recoverables. The group maintained excellent liquidity with $0.5 billion in cash and short-term investments.
 CIGNA Reinsurance Company, an affiliated professional reinsurer, 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. The rating assignment reflects the company's improved profitability and satisfactory leverage and liquidity measures.
 The CIGNA Group, a multi-line insurer, is the 12th largest property/casualty underwriter in the United States and has nearly $15 billion in assets.
 Country Companies, Bloomington, Ill. was assigned a 1992 Best's Rating of "A++" (Superior). The property/casualty group's superior financial strength was affirmed, and its rating level of was raised from "A+" to "A++." The rating applies to Country Mutual Insurance Company and two affiliates that reinsure their business with Country Mutual.
 The group's underwriting results improved significantly in 1991 in its predominant personal and farmowners lines, producing a combined ratio of 102. The group continued to produce superior profitability with an average operating ratio of 88 over the last five years. The group is very conservatively leveraged with $520 million of writings supported by $484 million of surplus.
 Liquidity measures, including $70 million of cash flow from operations, remain strong with unaffiliated investments that exceeded net liabilities by over 70 percent in 1991.
 Despite the group's personal lines concentration in Illinois, its extraordinary balance sheet strength and reinsurance protection enable the group to withstand claims from substantial catastrophic events. Furthermore, Illinois has a favorable regulatory environment with no problematic residual insurance market or regulatory rate restrictions.
 Country Companies, which writes 85 percent of its business in Illinois, is the 65th largest property/casualty underwriter in the United States and has $1.1 billion in assets.
 Employers Reinsurance Group, Overland Park, Kan. was assigned a 1992 Best's Rating of "A++" (Superior). The group's superior financial strength was affirmed, and its rating level was raised from "A+" to "A++." This rating applies to the parent company, Employers Reinsurance Corporation, and a subsidiary.
 The group continued to produce superior profitability with a five- year operating ratio of 81. Despite $500 million of dividends paid to its parent, General Electric Financial Services, in the last two years, the group's surplus increased 120 percent to $1.6 billion in the last five years from strong operating earnings and significant investment gains. During that period, net writings of $1.3 billion remained relatively unchanged, producing very conservative leverage measures. The group maintained favorable liquidity in its balance sheet, enhanced by strong operating cash flows (before stockholder dividends) that have averaged $400 million a year. The group's investment portfolio, predominantly invested in tax-exempt bonds, is well diversified and of high quality.
 First Excess and Reinsurance Corporation, an affiliated professional reinsurer, 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. The rating assignment reflects the company's continued strong profitability, conservative leverage, and satisfactory liquidity.
 Employers Reinsurance Group, the second largest professional reinsurer in the United States, specializes in casualty excess of loss and accident and health reinsurance and has $5.6 billion in assets.
 Ford Motor Insurance Group, Dearborn, Mich. 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 "A+" rating applies to two distinct operations comprised of the American Road Insurance Group and the Associates Insurance Group.
 The consolidated group continued to generate strong net operating earnings with a five-year operating ratio of 76. Earnings are largely driven by the group's profitable auto warranty business, now in run-off. On a five-year basis, surplus increased 105 percent to $730 million from strong net operating income and significant common stock gains, allowing the consolidated group to pay an extraordinary dividend of $270 million to its parent in 1991. Conservative operating leverage is maintained with $416 million of net writings supported by $730 million of surplus. Liquidity remains favorable as unaffiliated investments exceeded net liabilities by more than 50 percent in 1991.
 The Ford Motor Insurance Group specializes in collateral protection insurance for financed vehicles and properties as well as extended warranty protection for various Ford affiliates. The group is the 80th largest property/casualty underwriter in the United States and has $1.9 billion in assets.
 Fremont General Group (property/casualty) --The following members were assigned 1992 Best's Ratings. Fremont Pacific Insurance Group, Glendale, Calif. was assigned a 1992 Best's Rating of "A" (Excellent). The "A" rating applies to three inter-company pool members that began operating under a pooling arrangement as of January 1, 1992.
 The pool, led by Fremont Compensation Insurance Company, continued to produce strong operating results with a five-year operating ratio of 89. Excellent underwriting results, driven largely from California workers' compensation business, includes consistently favorable reserve development, with a combined ratio of 105 recorded in 1991. Strong operating income and a $17 million capital contribution increased surplus 22 percent in 1991 and improved leverage to satisfactory levels with $372 million of net writings supported by $168 million in surplus. Satisfactory liquidity is maintained with nearly $600 million invested in high quality corporate bonds.
 Fremont Indemnity Company, an affiliate, 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 was downgraded from "A-" to "B++." The rating action reflects the company's downward trend in profitability from significant run-off of its facultative casualty assumed business as well as deteriorating liquidity.
 The Fremont General Group, which specializes in workers' compensation and claims-made medical malpractice business primarily in California, is among the 100 largest property/casualty underwriters in the country and has $1.3 billion in assets.
 GRE Albany-Atlas Group (part of the GRE Insurance Group), New York, N.Y. was assigned a 1992 Best's Rating of "A-" (Excellent). The group's excellent financial strength was affirmed, and its rating level of "A-" was unchanged. The rating applies to the two inter-company pool members.
 The pool, led by Albany Insurance Company, produced improved profitability measures in 1991 with the combined ratio decreasing 6 points to 109. Liquidity remained satisfactory and was enhanced by strong cash flows during the year. Leverage measures also improved with net writings of $117 million supported by $76 million of surplus.
 Midwestern Indemnity Company, an affiliate, 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. The rating reflects continued overall profitability, favorable liquidity, strong cash flow and satisfactory leverage.
 GRE Insurance Group, a multi-line insurer, is among the 100 largest property/casualty underwriters in the country and has $586 million of assets.
 Harleysville Insurance Companies (property/casualty), Harleysville, Pa. 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. This rating applies to the seven inter-company pool members.
 The pool, led by Harleysville Mutual Insurance Company, has maintained strong operating results as evidenced by an average operating ratio of 92 over the past five years. Underwriting results, however, have moderately deteriorated in recent years as the combined ratio rose to 108 in 1991 due to continuing rate inadequacies in its dominant private passenger auto line and increased price competition within its commercial lines.
 Consistent operating income has produced a 50 percent gain in surplus over the last five years. Leverage measures remain prudent, but have deteriorated slightly in recent years, with $675 million in net writings supported by $297 million in surplus. Liquidity measures are adequate and are enhanced by the pool's strong cash flows.
 Harleysville Insurance Companies, a multi-line insurer, is among the 100 largest property/casualty insurers in the United States and has $1.5 billion in assets.
 The Hartford Steam Boiler Group, Hartford, Conn. was assigned a 1992 Best's Rating of "A++" (Superior). The group's superior financial strength was affirmed, and its rating level was raised from "A+" to "A++." This rating applies to Hartford Steam Boiler Inspection & Insurance Company and two other affiliates.
 The group continued to produce outstanding underwriting results with a five-year combined ratio of 87, reflecting favorable loss experience in its boiler and machinery line of business. Surplus increased 16 percent in 1991, reflective of strong operating earnings and significant investment gains which enabled the group to pay increased dividends of $40 million to its parent. The group operates with very conservative leverage relative to its peers with $302 million in net writings supported by $363 million in surplus. Balance sheet liquidity is outstanding with 113 percent of the group's surplus invested in a high quality, well diversified stock portfolio which substantially appreciated in 1991.
 The Hartford Steam Boiler Group continues to maintain a leadership position in boiler and machinery insurance both in terms of market share and loss control applications. The group is among the 100 largest property/casualty underwriters in the United states and has $700 million in assets.
 Interinsurance Exchange of the Automobile Club of Southern California, Los Angeles, Calif. was assigned a 1992 Best's Rating of "A" (Excellent). The company's excellent financial strength was affirmed, and its rating level was changed from "Qualified A" to "A." The elimination of the qualified modifier from the company's rating reflects the agreement reached between the company and the California Insurance Department in 1991 fulfilling its Proposition 103 rate rollback obligations. As part of the agreement, the company, which is a reciprocal exchange, issued $81 million of dividends to policyholders in 1991 which were in addition to $36 million of policyholder dividends declared in 1990.
 Despite these significant dividends, surplus increased 14 percent in 1991 from continued strong operating income and investment gains. Leverage measures are satisfactory with $819 million in net writings supported by $487 million in surplus and have improved in recent years from little change in premium volume. The company maintains favorable liquidity with nearly 60 percent of its bond portfolio invested in U.S. Government obligations.
 The Interinsurance Exchange is among the 50 largest property/casualty insurers in the United States and has $1.9 billion in assets.
 Metropolitan Group (property/casualty), New York, N.Y. was assigned a 1992 Best's Rating of "A-" (Excellent). The group's excellent financial strength was affirmed, and its rating level of "A-" was unchanged. The rating applies to four inter-company pool members that historically have pooled their results and the Metropolitan Reinsurance Company, which entered the pool effective January 1, 1992.
 The pool, led by the Metropolitan Property and Casualty Insurance Company, has experienced five years of volatile underwriting results, producing a five-year average combined ratio of 110. Surplus increased 21 percent in 1991 largely from the $50 million contribution of the Metropolitan Reinsurance Company to the lead pool company. The group is strategically expanding its writings in the personal lines market with 50 percent growth in writings in the last five years causing leverage measures to remain high relative to its peers, with $814 million in net writings supported by $331 million in surplus. Adequate balance sheet liquidity has been maintained and is supported by a well-diversified bond portfolio.
 The Metropolitan Group, which is among the top 50 property/casualty insurance companies in the United States and has $1.5 billion in assets. The property/casualty lines are distributed by the same group of experienced agents that handle the Metropolitan Life Insurance Company's products.
 -0- 7/6/92 R
 /FIRST AND FINAL ADD TO FOLLOW/


TQ -- NY016R -- 6710 07/06/92 15:45 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:Jul 6, 1992
Words:3125
Previous Article:MIPS COMPUTER SYSTEMS KOREA LTD. BECOMES KOREA SILICON GRAPHICS LTD.
Next Article:/FIRST AND FINAL ADD/ 1992 BEST'S RATINGS ASSIGNED TO 293 PROPERTY/CASUALTY COMPANIES INCLUDING 23 LARGE INSURERS
Topics:


Related Articles
1992 BEST'S RATINGS ASSIGNED TO 142 COMPANIES INCLUDING TWO LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 223 COMPANIES INCLUDING 15 LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 221 COMPANIES INCLUDING EIGHT LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 346 LIFE/HEALTH COMPANIES INCLUDING NINE LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 293 PROPERTY/CASUALTY COMPANIES INCLUDING 23 LARGE INSURERS
/FIRST AND FINAL ADD/ 1992 BEST'S RATINGS ASSIGNED TO 293 PROPERTY/CASUALTY COMPANIES INCLUDING 23 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
1992 BEST'S RATINGS ASSIGNED TO 380 COMPANIES INCLUDING 23 LARGE INSURERS
REVIEW OF 1992 BEST'S RATINGS

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters