DUFF & PHELPS: CONNECTICUT GENERAL LIFE INSURANCE COMPANY CLAIMS PAYING ABILITY RATED 'AAA'
CHICAGO, July 16 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned an initial claims paying ability rating of `AAA' (Triple-A) to Connecticut General Life Insurance Company (CGL). The rating is based on the company's strong franchise in a number of insurance markets, as well as, CGL's consistent operating profitability, reasonable utilization of operating leverage, and well-managed investment portfolio. CGL is headquartered in Bloomfield, Conn., and is the seventh largest life insurance company in the U.S. with statutory admitted assets of $44.1 billion, and adjusted surplus of $2.0 billion at March 31, 1993. The company is ultimately a subsidiary of CIGNA Corp., a multi-line insurance holding company which reported GAAP assets of $78.2 billion and stockholders equity of $5.8 billion at March 31, 1993. CIGNA's senior debt is rated `A+' (Single-A-Plus) by Duff & Phelps. CGL is the primary life insurance subsidiary of CIGNA. The company has a well-diversified product mix with a strong market position in the group life & health, group pension, and individual life insurance markets. Statutory operating results have been very favorable for the last five years as evidenced by the company's average annual return on adjusted surplus for the period 1988-92 of 18.5 percent. In 1992, CGL reported statutory after-tax operating income of $379 million on premium and deposit volume of $3.5 billion. These results reflect the company's strong persistency, low operating expenses, and stable investment income. Operating leverage, as measured by the ratio of adjusted liabilities to adjusted surplus was 14.1 times at yearend 1992. At Dec. 31, 1992, CGL's invested assets were concentrated in bonds (55 percent of invested assets), and mortgage loans and real estate (36 percent). CGL has a long history of successful investing in private placement securities, and 61 percent of all fixed income securities were private placements at year end 1992. At that time, 88 percent of all fixed income investments were rated investment grade and the majority of non-investment grade bond holdings were in the private placement portfolio. The company's mortgage loan portfolio is well- diversified geographically and is primarily concentrated in office and retail properties. At year end 1992, approximately 17 percent of all mortgage loans were delinquent, foreclosed or restructured, which is near industry norms. However, a large percentage of problem mortgage loans are dedicated to experience rated insurance contracts, under which losses in investment income or asset value from troubled assets are born by the policyholder and do not impact CGL's surplus. -0- 7/16/93 /CONTACT: James B. Auden, CFA of Duff & Phelps Credit Rating Co., 312-368-3146/ (CI)
CO: Connecticut General Life Insurance Company ST: Connecticut IN: INS SU: RTG
WB-MG -- NY019 -- 2434 07/16/93 11:49 EDT
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|Date:||Jul 16, 1993|
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