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A.M. BEST ISSUES 255 BEST'S RATINGS IN ELEVENTH WEEKLY RELEASE

 OLDWICK, N.J., June 14 /PRNewswire/ -- The A.M. Best Company today released the 11th edition of its 1993 Best's Rating Monitor. Best's Ratings were issued to 133 property/casualty companies and 123 life/health firms, including American Financial Insurance Group (property/casualty), Continental Insurance Companies, Kemper Reinsurance Company, The Mutual Life Insurance Company of New York (MONY) and Prudential Reinsurance Company.
 Based on the evaluation of year-end 1992 financial results and subsequent relevant events, Best's Ratings will be released through the beginning of July. To date, Best's Ratings have been assigned to 1,382 property/casualty companies and 903 life/health insurers. Best's Ratings are continuously monitored throughout the year with formal rating reviews performed on six-month and nine-month financial results.
 Rating rationales for 10 property/casualty and four life/health groups are listed below:
 Alfa Insurance Group, Montgomery, Ala., was assigned a 1993 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 Alfa Mutual Insurance Company, Alfa General Insurance Company, Alfa Insurance Corporation, Alfa Mutual Fire Insurance Company and Alfa Mutual General Insurance Company.
 "This rating assignment reflects management's conservative operating strategy, outstanding financial performance and very strong capital position," said John H. Snyder, senior vice president of Best's property/casualty division. These positive rating factors are derived from the group's extraordinary balance-sheet strength and reinsurance protection, which enables it to withstand claims from a hurricane striking Alabama or an earthquake on the New Madrid fault line. In addition, the group's personal lines concentration is in Alabama, which has a favorable regulatory environment with no problematic residual insurance market or regulatory statutes. The Alfa Group is the second largest writer of both private passenger automobile and homeowners insurance in Alabama.
 "The group's profitability historically has been superior to the industry with a five-year average combined ratio of 100, which is 10 points better than the industry," Mr. Snyder added. The group has conservative leverage and a strong liquid asset position, which has consistently outperformed the industry. Net premium volume for the group at year-end 1992 was $460 million, ranking it among the 100 largest property/casualty groups. Consolidated assets and policyholders' surplus at year end amounted to $1.2 billion and $727.2 million, respectively.
 Allianz Insurance Group, Los Angeles, was assigned a 1993 Best's Rating of Qualified "A" (Excellent). The group's excellent financial strength was affirmed and its rating level of Qualified "A" was unchanged. This rating applies to Allianz Insurance Company and Allianz Underwriters Insurance Company, which have operated under a reinsurance pooling arrangement since 1987.
 "This rating assignment reflects the pool's overall favorable operating performance, solid capital position and strong balance-sheet liquidity," according to John H. Snyder, senior vice president of Best's property/casualty division. These positive rating factors are further enhanced by the group's strong and committed parent, Allianz AG Holding, Munich, Germany. The parent is more than a century old with over $7 billion in writings and operations worldwide.
 The pool operates primarily as a commercial lines carrier with an emphasis placed on international reverse flow business, California workers' compensation for larger loss-sensitive accounts and specialty property coverages on large builders' risks. Premium also is generated through membership in various pools and syndicates. A conservative operating strategy has been maintained including a very strong reserve position. Considerable reserve strengthening occurred during 1992 and adversely impacted the pool's earnings for the year as evidenced by a 15-point increase in the loss ratio. Claims frequency improved considerably on California workers' comp during 1992, due in part to legislation passed by that state and by actions taken by the company to address the problem of fraudulent claims. A strong capital position has been maintained with $128 million of consolidated surplus supporting $96 million of net premium writings. Considerable dependence is placed on reinsurers with reinsurance recoverables in excess of 2.6 times surplus.
 American Financial Insurance Group (property/casualty), Cincinnati, was assigned a 1993 Best's Rating of "A" (Excellent). The group's excellent financial strength was affirmed and its rating level of "A" was unchanged. This rating applies to the group's nine property/casualty intercompany pool, led by Great American Insurance Company, and four affiliated companies that are reinsured by members of the pool.
 This rating assignment reflects management's disciplined underwriting approach, excellent financial performance, good capitalization and strong franchise which generates a balanced mainstreet commercial, specialty and personal lines book. In addition, the group has modest catastrophic exposure enhanced by a strong reinsurance program. These positive rating factors are offset somewhat by aggressive investment leverage, with substantial holdings in below-investment-grade bonds and a concentrated equity portfolio. In addition, significant financial leverage is maintained by the parent holding company, American Financial Corporation, and several other subsidiaries/investee companies.
 "The group's underwriting results historically have been superior to the industry with a 10-point loss ratio advantage," said John H. Snyder, senior vice president of Best's property/casualty division. The group's strong underwriting results are derived from favorable loss results within its personal automobile business, the group's disciplined underwriting approach in reducing its commercial writings in overly competitive lines and its modest exposure to catastrophes. "The group in recent years has improved its underwriting leverage and currently operates with relatively conservative underwriting leverage -- $1.2 billion in net premiums supported by $846 million in surplus," Mr. Snyder added. This leverage is enhanced by maintenance of strong loss reserves.
 The group maintains aggressive investment leverage, with 30 percent of surplus invested in below-investment-grade bonds and over 150 percent of surplus invested in a concentrated equity portfolio comprised largely of publicly traded affiliated stock that experienced market value declines in 1992. Significant financial leverage exists at the parent holding company and other subsidiaries/investee companies, with aggregate long-term debt of over $2 billion. The majority of the group's debt repayment is several years out. Recently, management decided to strategically focus on the insurance underwriting business and has begun the sale of certain non-core assets, with proceeds going toward strengthening the insurance operations and debt repayment. American Financial Insurance Group currently ranks among the 40 largest insurers in the United States with $3.8 billion in assets.
 In addition, American Empire Surplus Lines Group, an affiliated group, was assigned a 1993 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 intercompany pool members led by American Empire Surplus Lines Insurance Company.
 This rating assignment reflects the pool's outstanding financial performance, specialized excess and surplus lines underwriting expertise and strong capitalization. These positive rating factors are offset somewhat by aggressive investment leverage, with 32 percent of surplus invested in below-investment-grade bonds and over 50 percent of surplus invested in a concentrated equity portfolio comprised largely of publicly trade affiliated stocks that experienced market value declines in 1992.
 The group's consistently strong operating results, with an average combined ratio of 72 during the past five years, are driven by its disciplined underwriting approach and sizable favorable reserve development related to prior year reserves, particularly related to accident years 1986 and 1987. The group operates with conservative underwriting leverage, with $36 million of premiums supported by $103 million of surplus in 1992. Premium volume is down nearly 75 percent from 1987 levels reflective of the group's disciplined underwriting approach to current overly competitive market conditions.
 American Integrity Insurance Company, Philadelphia, was assigned a 1993 Best's Rating of "E" (Under State Supervision). The company's rating was changed from "B" (Good) to "NA-11 x" (Rating Suspended) on December 14, 1992, following a sharp deterioration in the company's financial health and future viability, and changed to "E" following the Pennsylvania Department of Insurance's petition last week to suspend the company's operations and to ultimately liquidate it.
 This action was taken after three attempts to recapitalize the parent company, American Integrity Corp., failed and efforts to refinance the insurance subsidiary were terminated. The Pennsylvania Department of Insurance is proceeding to suspend the company from the further transaction of business and to ultimately liquidate the company.
 "American Integrity's financial condition worsened in 1992 as the result of substantial revenue and cost pressures," according to John H. Snyder, senior vice president of Best's property/casualty division. The sale of a block of Medicare supplement business, which had unfavorable loss experience, and the late filing of rates and forms in 1992 eroded the company's competitive position in the turbulent health care market. The company's 1992 profitability was also hurt by adverse development on inadequate prior-year loss provisions and by disproportionately high expenses that were not reduced to match the drop in premium volume. Operating losses shrunk policyholders' surplus to a dangerously low level that created the need for a capital infusion.
 Amica Mutual Insurance Company, Providence, R.I., was assigned a 1993 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 management's conservative operating strategy, superior financial performance, above-average capitalization and liquid balance sheet," said John H. Snyder, senior vice president of Best's property/casualty division. Excellent profitability continued for this personal lines underwriter as shown by a five-year average operating ratio of 93 (after allowance for substantial dividends to be paid to policyholders). Amica ranks among the 100 largest property/ casualty companies in the United States with $1.6 million of assets.
 Continental Insurance Companies, New York, was assigned a 1993 Best's Rating of "A-" (Excellent). The group's excellent financial strength was affirmed and its rating level of "A-" was unchanged. This rating applies to the group's 17 intercompany pool members and an affiliate that derives its rating from the lead company of the pool, The Continental Insurance Company.
 This rating assignment reflects the group's generally stable underwriting results, its leadership position within the commercial package market and its adequate capitalization. These positive rating factors are derived from Continental's expanding preferred lines strategy, in which the group is targeting commercial and personal package, as well as other select specialty insurance business. In addition, the rating reflects recent actions taken by management to enhance the group's surplus which has been flat for four years. These actions include reducing stockholder dividends paid to the parent holding company, Continental Corporation, as well as the sale of non-core businesses, including the recently announced sale of AFCO Credit Corporation.
 "These positive rating factors are largely offset by the group's higher-than-average underwriting leverage, the group's relatively low investment yields that will continue in the future, given Continental's substantial sell-off and repositioning of its bond portfolio in 1992, and its sizable exposure to catastrophes as evidenced by significant losses in 1992, the majority of which stemmed from Hurricanes Andrew and Iniki," said John H. Snyder, senior vice president of Best's property/casualty division. Management has taken a number of corrective actions to limit is exposure to future catastrophes including the discontinuation of its traditional reinsurance business written by Continental Reinsurance Corp., which was the source of nearly one-half of the group's Hurricane Andrew losses. In addition, its 60 percent- owned subsidiary, First Hawaii Insurance Company, initiated a significant nonrenewal plan earlier this year to limit its exposures to catastrophes in Hawaii.
 Despite its preferred lines strategy and its adherence to disciplined pricing, "Continental's underwriting results have been modestly worse than the industry, with an average combined ratio of 112 over the past five years, reflective of elevated catastrophe losses," Mr. Snyder continued. "Nevertheless, the group's expense reduction initiatives, continued focus on more profitable products, and actions taken to reduce catastrophe losses should lead to improved underwriting results in the future," he said.
 The group's leverage, while higher than average, is partially mitigated by its sizable retrospectively rated commercial lines business and risk-free service carrier operations. The group's liquidity, while modest, has been enhanced by a greater proportion of invested assets being allocated to high-quality, fixed-income securities in recent years. Following the sale of AFCO Credit Corp., Continental Corp.'s financial leverage will have been further moderated, with a pro-forma debt-to-equity ratio of 40 percent. The Continental Insurance Companies rank among the 15 largest property/casualty insurers in the U.S. with $3.7 billion of net premiums written supported by $1.7 billion of surplus.
 -0- 6/14/93
 /FIRST AND FINAL ADD TO FOLLOW/
 /CONTACT: Rhonda J. Ruch of A.M. Best Company, 908-439-2200, ext. 5684/


CO: ST: IN: INS SU: RTG TS -- NY026 -- 1557 06/14/93 10:50 EST
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