Printer Friendly

1992 BEST'S RATINGS ASSIGNED TO 319 COMPANIES INCLUDING 15 LARGE INSURERS

 1992 BEST'S RATINGS ASSIGNED TO 319 COMPANIES
 INCLUDING 15 LARGE INSURERS
 OLDWICK, N.J., June 8 /PRNewswire/ -- A.M. Best Company today released the 1992 Best's Ratings for 319 insurance companies, including 10 large property/casualty insurers and five 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 953 property/casualty and 564 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 insurance entities.
 Aetna Life and Casualty Group (property/casualty), Hartford, Conn., was assigned a 1992 Best's Rating of "A" (Excellent). The property/casualty group's excellent financial strength was affirmed, and its "A" rating level was unchanged. This rating applies to the group's parent company, Aetna Life and Casualty Company, the six members of the Aetna Commercial Lines Pool, led by The Aetna Casualty and Surety Company, and the five members of the Aetna Personal Lines Pool, led by The Standard Fire Insurance Company.
 The group produced net operating income of $223 million with an operating ratio of 94 in 1991, but this marginal profitability was well below prior years. In 1991, surplus increased 5 percent to $4.8 billion, primarily due to net operating income and investment gains. Liquidity measures are lower than industry levels due to large premium balances and reinsurance recoverables. A real estate and mortgage portfolio of $2.6 billion represented 57 percent of surplus and the group has been actively managing it as part of an ongoing plan to significantly downsize its portfolio.
 The group's leverage measures improved with $6.8 billion in direct writings and $13.5 billion in loss reserves supported by $4.8 billion of policyholders' surplus; however, they remain slightly higher than its peers'. Aetna Life and Casualty Group is the fifth largest property/casualty underwriter in the United States with $23.2 billion in assets.
 American Agricultural Insurance Company, Park Ridge Ill., 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.
 Policyholders' surplus increased 12 percent to $139 million, due to $10 million of net operating income and $5 million of capital gains. Profitability continued to be excellent for this professional reinsurer which has a five-year average operating ratio of 88.
 In the last five years, net writings have been flat and surplus has gained 66 percent, allowing the company to maintain prudent operating leverage. The company holds high quality investments and maintains sound liquidity. American Agricultural is one of the 30 largest professional reinsurers in the United States with $430 million in assets and provides excess casualty and property surplus reinsurance to affiliated farm bureau insurance companies.
 American National Insurance Company, Galveston, Texas, has been 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 "niche" position in the traditional life insurance market, strong capitalization, conservative balance sheet, and consistent and substantial earnings performance. While American National's group accident and health results have been unprofitable in the four years prior to 1991, consistently strong profits from its core traditional and home service life insurance segments have more than offset deficits in this area. American National's significant presence in the equity markets has produced favorable investment returns, with unrealized capitals totaling over $127 million during 1991. The company maintains a favorable overall liquidity position, as $1.2 billion in investment-grade bonds, high quality equity investments, and strong cash flows support a very stable liability structure.
 Growth in premium income has been modest in recent years, reflecting the market segment in which the company operates. Although annual cash dividend payments to the parent concern have partially offset statutory profits, American National Insurance Company continues to maintain very conservative capitalization. During 1991, capital and surplus funds advanced nearly 7 percent to $996 million. American National Insurance Company ranks among the 60 largest life/health insurers in the United States when measured by admitted assets.
 Due to its strategic role as a subsidiary of American National Insurance Company, American National Life Insurance Company of Texas, Galveston, Texas 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 is based on the consolidated performance of the parent and the subsidiary. American National Life of Texas is currently concentrating its sales efforts in the association group major medical accident and health market.
 Federated Mutual Group, Owatonna, Minn., 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." This rating applies to the group's two property/casualty members, Federated Mutual Insurance Company and Federated Service Insurance Company.
 The group continued to diversify its book of business by de-emphasizing general liability coverages and has made progress towards reducing its exposure to future environmental claims. However, unfavorable underwriting results in its commercial lines book led to a combined ratio of 112, which was five points higher than the prior year. Net operating income of $19 million in 1991 was only half the amount recorded the prior year.
 Leverage and liquidity measures remained excellent. Net writings of $680 million were supported by $403 million in surplus. The Federated Mutual Group is among the 75 largest property/casualty underwriters in the United States with $1.6 billion in assets.
 Frankona Reinsurance Company (U.S. Branch), Kansas City, Mo., was assigned a 1992 Best's Rating of "A" (Excellent). The branch's excellent financial strength was affirmed, and its rating level of "A" was unchanged.
 Substantial net investment income continued to offset underwriting losses in each of the past five years, producing a net operating gain of $23 million and a favorable operating ratio of 85 during that period. In addition, $45 million has been contributed by its German parent over the last five years, supporting a 344 percent increase in surplus to $90 million.
 The bolstered surplus position maintained conservative operating leverage measures. Excellent liquidity is maintained as unaffiliated assets exceeded net liabilities by 75 percent. This U.S. Branch of the Frankona Reinsurance Company of Germany is among the largest 30 professional property/casualty reinsurers in the United States with $238 million in assets.
 Massachusetts Indemnity and Life Insurance Company (MILICO), Boston, was assigned a 1992 Best's Rating of "A-" (Excellent). The company's financial strength was upgraded from very good to excellent, and its rating level was upgraded from "B+" to "A-."
 This rating assignment reflects MILICO's operating progress which has been realized in connection with a strategic restructuring instituted by the current Primerica Corporation executive management, and the company's conservative balance sheet and adequate level of capitalization. As part of its restructuring, MILICO has reduced its utilization of financial reinsurance and other financing mechanisms and significantly revised its distribution system. Management responsibility of the Primerica Financial Services sales force is assigned to an executive management team that reports directly to Primerica Corporation.
 As a result of the changes surrounding its distribution system, MILICO has experienced a significant reduction in the volume of new business issued over the past two years. A.M. Best anticipates that the steps taken by management will enhance future new business activity and continue to strengthen the company's operating performance. At year-end 1991, MILICO reported assets of $1.6 billion and capital and surplus of $483 million.
 Mercantile and General Reinsurance Company of America, Morristown, 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.
 In 1991, the company was set back with significant reinsurance participations in two catastrophic events, the Oakland, Calif. fire and the Meridian Plaza fire in Philadelphia. Despite these two catastrophes, the company was able to maintain conservative leverage and liquidity positions, as well as increase its policyholders' surplus by 14 percent. An outstanding five-year operating ratio of 91 has been achieved along with an average combined ratio of 111 for the same period. Mercantile and General Reinsurance Company of America is one of the 30 largest professional property/casualty reinsurers in the United States with $311 million in assets and is a subsidiary of Prudential Corporation plc of London, England, its ultimate parent.
 Mutual of Omaha Insurance Company, Omaha, Neb., 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 leading position in the individual health insurance marketplace, its superior balance sheet quality and investment management, and favorable capitalization. Although profitability has fluctuated due to the volatility associated with the health insurance industry, statutory earnings of $132 million have been reported over the past four years. Mutual of Omaha maintains a conservative investment posture with nearly 99 percent of its bond portfolio comprised of investment-grade securities.
 United of Omaha Life Insurance Company, Omaha, Neb., a wholly owned subsidiary of Mutual of Omaha, 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 United of Omaha's strategic role within the Mutual of Omaha organization as a marketer of individual and group life, annuity and accident and health products, its favorable earnings performance and good capitalization.
 Nationwide Group (property/casualty), Columbus, Ohio, 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 12 property/casualty inter-company pool members, as well as two affiliated companies that are reinsured by the pool.
 Led by Nationwide Mutual Insurance Company, the pool had a strong 21 percent increase in surplus funds in 1991 to $3.8 billion from net operating income and unrealized capital gains. Underwriting results improved significantly and a combined ratio of 106 was reported versus 110 the prior year. The group's balance sheet strengthened, and at year-end invested assets exceeded net liabilities by 23 percent. Liquidity and leverage measures improved, enhanced by strong cash flow of $900 million in 1991. The Nationwide Group is the seventh largest property/casualty underwriter in the country with over $15 billion in assets.
 New Jersey Manufacturers Insurance Group, West Trenton, N.J., 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." This rating applies to New Jersey Manufacturers Insurance Company and its subsidiary, New Jersey Re-Insurance Company.
 The rating reflects deterioration in overall profitability from escalating underwriting losses in its principal lines, as well as substantial dividends paid to policyholders. New Jersey Manufacturers writes 98 percent of its business in New Jersey, over half of which is auto insurance. In recent years the company has been subject to increasing costs imposed upon insurers in New Jersey, such as residual market assessments and mandatory underwriting of largely unprofitable automobile business.
 The group is also New Jersey's largest workers' compensation writer, and losses in this line have increased due to heightened claim activity related to the economic recession and increased medical costs. Combined with the underwriting deterioration in its major lines, part of which is due to New Jersey's poor insurance regulatory environment, the group has chosen to gradually reduce policyholder dividends because of its mutual, or policyholder, ownership structure. Although surplus declined 4 percent in 1991, the company continues to be conservatively leveraged with $595 million of writings supported by $610 million of surplus. Liquidity and cash flow are excellent and investments are of high quality. Strong reserves are maintained. The group is the 62nd largest property/casualty underwriter in the United States with $2.1 billion in assets.
 New York 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 was raised from "A+" to "A++."
 This rating assignment reflects the company's strong market position in individual life insurance, annuities and pensions, its favorable profitability, excellent asset quality and strong capitalization. Over the last five years, New York Life has generated $728 million in operating profits after the payment of $5.2 billion in policyholder dividends. This profitability, coupled with realized investment gains, has enabled New York Life to increase surplus funds 49 percent since year-end 1986.
 The company's liquidity is supported by substantial operating cash flow and over $24 billion of investment-grade bonds and short-term securities held at year-end 1991. New York Life is the sixth largest life/health insurer in the United States when measured by admitted assets.
 Due to its strategic marketing role as a subsidiary of New York Life, New York Life Insurance and Annuity Corporation (NYLIAC), 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 is based on the consolidated performance of the parent and the subsidiary. NYLIAC primarily markets universal life insurance and individual annuity contracts through the parent company's career agency force.
 SAFECO Insurance Companies (property/casualty), Seattle, 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 the group's five property/casualty inter-company pool members and the two companies that are reinsured by the pool.
 The pool, led by SAFECO Insurance Company of America, has produced consistent operating earnings, despite experiencing record claim levels in 1990 and 1991 from catastrophic occurrences. The group produced a five-year operating ratio of 89 in which surplus gained 92 percent during that period. Leverage is conservative with $1.6 billion in net writings supported by $1.2 billion in surplus. Liquidity is superior with $2.6 billion in investment-grade bond holdings and is enhanced by strong cash flows. The SAFECO Insurance Group is primarily a personal lines writer and is among the 30 largest property/casualty groups in the United States with more than $4 billion in assets.
 The St. Paul Companies, Inc. (property/casualty), St. Paul, Minn., 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 four inter-company pool members and seven other St. Paul companies that are reinsured by pool members.
 The pool, led by St. Paul Fire and Marine Insurance Company, continued to produce superior underwriting results with a five-year combined ratio of 104 and an operating ratio of 82. Surplus increased 15 percent in 1991 to $1.7 billion from consistently strong net operating income. Net writings increased 22 percent to $3.1 billion over the last five years, and surplus gained 83 percent, producing conservative leverage measures. The group maintains excellent liquidity measures enhanced by strong cash flows of approximately $775 million in 1991. The group is the 16th largest property/casualty underwriter in the United States with more than $10 billion in assets.
 Sun Life Insurance Company of America, Baltimore, 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 diversified distribution channels, strong asset/liability management discipline, favorable earnings performance and improved capitalization. In addition, this rating acknowledges the financial support of its ultimate parent, Broad, Inc. During 1991, capital and surplus funds increased 21 percent, principally due to operating earnings and investment gains. Plans call for Sun Life to continue to strengthen its capital base and reduce the risk profile of the investment portfolio.
 The company maintains a good liquidity position with reasonable operating cash flow and more than $3 billion of investment-grade bonds, cash and short-term securities held at year-end 1991. Sun Life ranks among the 50 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 Sun Life of America, First Sunamerica 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. This rating is based on the consolidated performance of the parent and the subsidiary.
 Anchor National Life Insurance Company, Los Angeles, a wholly owned subsidiary of Sun Life of America, 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. This rating assignment acknowledges the company's role as a variable annuity subsidiary of Sun Life, its favorable earnings performance, and reasonable capitalization relative to its insurance and investment risk profile.
 Trenwick America Reinsurance Corporation, Stamford, Conn., was assigned a 1992 Best's Rating of "A" (Excellent). The company's excellent financial strength was affirmed, and its rating level was raised from "A-" to "A."
 The company continues to produce excellent operating results with a five-year operating ratio of 82, and surplus increased 28 percent during that period to $139 million. The company continues to maintain excellent leverage and liquidity measures in 1991, and its non- affiliated invested assets exceeded net liabilities by 46 percent. Trenwick America Reinsurance is one of the 30 largest professional property/casualty reinsurers in the United States with $431 million in assets.
 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.
 -0- 6/8/92
 /CONTACT: Christina Stein of A.M. Best, 908-439-2200 ext. 5642/ CO: A.M. Best Company ST: New Jersey IN: INS SU: ECO


TS -- NY012 -- 7785 06/08/92 09:55 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:Jun 8, 1992
Words:3027
Previous Article:PROVIDENT BANCORP ANNOUNCES COMMENCEMENT OF STOCK OFFERINGS IN CONNECTION WITH S & L ACQUISITIONS
Next Article:PROPERTY TRUST OF AMERICA ACQUIRES TWO MULTIFAMILY PROJECTS FOR $13.7 MILLION IN ALBUQUERQUE, NEW MEXICO AND EL PASO, TEXAS
Topics:


Related Articles
1992 BEST'S RATINGS ASSIGNED TO 223 COMPANIES INCLUDING 15 LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 136 COMPANIES INCLUDING SIX LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 221 COMPANIES INCLUDING EIGHT LARGE INSURERS
1992 BEST'S RATINGS ASSIGNED TO 204 COMPANIES INCLUDING 12 PROMINENT INSURERS
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
LIFE/HEALTH RATING UPGRADES OUTNUMBER DOWNGRADES FOR FIRST TIME IN TWO YEARS
Best's Rating Changes.

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