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ALEXANDER HAMILTON LIFE 'AA' CLAIMS PAYING AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --

 ALEXANDER HAMILTON LIFE 'AA' CLAIMS PAYING AFFIRMED BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Jan. 30 /PRNewswire/ -- Alexander Hamilton Life Insurance Co. of America's 'AA' claims paying ability is affirmed by Fitch. This action follows the announcement by Household International, Alexander Hamilton's ultimate parent, of a fourth quarter after-tax restructuring charge of $93 million. The charge is not expected to have an impact on Alexander Hamilton's operations.
 Alexander Hamilton has a strong balance sheet, good operating margins, and adequate capitalization. Overall asset quality is above industry standards and improving with the reduction of its high-yield portfolio to an estimated 4.6 percent of invested assets at year-end 1991, compared to a concentration at year-end 1990 of over 12 percent. Exposure to mortgages, at 10 percent of invested assets at year-end 1991, is far below an estimated industry average of 21 percent. The portfolio is diversified by property and geographical type, and is primarily comprised of residential mortgages, with about 20 percent representing commercial mortgages.
 Credit life and health products, distributed through affiliated companies of Household International are a strong and consistent source of revenue for Alexander Hamilton. Although operating margins are generally higher in credit related products than in individual or annuity lines, Alexander Hamilton's management has improved profitability in the latter two lines through product changes including revised commission structures to agents and lower expenses. Additionally, growth in the structured settlement and lottery annuities has been constrained due to increased competition in these lines, which has made achievement of internal return on equity objectives possible only at lower volumes. Through Sept. 30, 1991, Alexander Hamilton had statutory net income of $39.6 million compared to $24.5 million during the same period in 1990. Excluding 1991 capital gains, earnings were up 26.5 percent over the same period in 1990.
 Liquidity is strong given the company's liability mix and investment holdings. Capitalization is adequate and closely managed, with adjusted capital relative to liabilities at 5.4 percent as of Sept. 30. Fitch considers this financial leverage to be satisfactory in light of the insurer's high asset quality, good asset/liability and cash flow management techniques, and good liquidity.
 -0- 1/30/92
 /CONTACT: Lygia X. Campbell, 212-908-0500, or David P. Wells, 212-908-0517, both of Fitch/ CO: Alexander Hamilton Life Insurance Co. of America ST: Michigan IN: INS SU: RTG


CK -- NY118 -- 5462 01/30/92 16:43 EST
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Publication:PR Newswire
Date:Jan 30, 1992
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