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A.M. BEST TAKES RATING ACTION ON PRUDENTIAL DUE TO HURRICANE LOSSES

A.M. BEST TAKES RATING ACTION ON PRUDENTIAL DUE TO HURRICANE LOSSES
 OLDWICK, N.J., Sept. 24 /PRNewswire/ -- A.M. Best Company has reviewed its ratings assigned to members of the Prudential of America Group as a result of catastrophe losses from Hurricane Andrew.
 Effective immediately, the Prudential Property and Casualty (PRUPAC) Group's Best's Rating of "A" (Excellent) has been placed on Best's "Rating Watch List." This action reflects the impact of Hurricane Andrew, which the company expects will generate over $1 billion in gross losses, with an approximate net after-tax charge to earnings of $900 million. PRUPAC's surplus was approximately $580 million at June 30, 1992. This rating action applies to five members of the group led by Prudential Property and Casualty Insurance Company.
 In addition to significantly increasing PRUPAC's original storm loss estimates, the group also announced the anticipated $900 million net loss from Hurricane Andrew will be fully offset by a capital infusion by its parent, Prudential Insurance Company of America (part of the Prudential of America Group) by next week. Once this favorable transaction is completed PRUPAC's "Rating Watch List" status will be re- evaluated.
 The "A++" (Superior) Best's Rating of The Prudential Insurance Company of America remains unchanged, however, its rating is under review pending the funding of the planned $900 million capital infusion to PRUPAC. The Prudential remains strongly capitalized with approximately $10.5 billion in statutory surplus and conditional reserve funds as of June 30, 1992, and it has favorable liquidity to cover the losses at its subsidiary. In addition, Prudential maintains exceptional access to the capital markets, which adds to its financial flexibility. Management is currently considering various financing options through which it will provide for its subsidiary's capital needs. Once the financing arrangements are completed, the Best's Rating of The Prudential Insurance Company of America will be re-evaluated.
 An affiliated professional reinsurer, Prudential Reinsurance has a Best's Rating of "A" (Excellent). The group's excellent financial strength was affirmed, and its rating level of "A" was unchanged. Management expects that Hurricane Andrew losses will be substantial, however, they anticipate that the estimated net after-tax charge from Hurricane Andrew will be fully offset by 1992's projected earnings. Consequently, it is anticipated that the reinsurer's year-end surplus position will be maintained at 1991's year-end level of $590 million.
 -0- 9/24/92
 /CONTACT: Christina Stein of A.M. Best, 908-439-2200, ext. 5642/ CO: Prudential of America Group ST: IN: INS SU: RTG


CK -- NY032 -- 3039 09/24/92 10:57 EDT
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Publication:PR Newswire
Date:Sep 24, 1992
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