DUFF & PHELPS: OHIO NATIONAL LIFE INSURANCE COMPANY CLAIMS PAYING ABILITY REAFFIRMED AT 'AA'
CHICAGO, Oct. 15 /PRNewswire/ -- Duff & Phelps Credit Rating Co. reaffirms the "AA" (Double-A) claims paying ability of Ohio National Life Insurance Company (ONLIC) and its wholly owned subsidiary Ohio National Life Assurance Corporation (ONLAC). ONLIC and ONLAC, two separate organizations, are rated as a consolidated entity, because they have a single management team, and complementary business operations that are managed as one. The ratings reflect the combined companies' (Ohio National's) regional position in individual life and small group pension, conservative management, stable and improving earnings, relatively low investment risk, and stable reserves. Ohio National's excellent expense control and low cost structure should give the company an opportunity to realize continued profitability gains and growth in a low interest rate environment. Statutory profitability, as measured by return on average assets, has declined in recent years because of the growth in pension and annuity liabilities, with slimmer profit margins. This trend reversed in 1992 with flat GIC volume, increased target spreads for deferred annuities, emerging profits from a renewed focus on the individual life line of business, the maintenance of a low cost structure, and lower than expected disability income claim reserves. In 1992, ROA and ROS were 1.51 percent and 10.3 percent, respectively and improved from 1.48 percent and 7.7 percent the prior year. Profitability continues to improve in 1993. Ohio National's meets the capital needs to support business growth through internally generated profitability. Consolidated capitalization grew 18 percent in 1992 to $194 million, or 5.3 percent of consolidated assets. Consolidated operating leverage was 17.08 times at yearend 1992 and was conservative for the mix of business. Ohio National's consolidated admitted assets were $3.9 billion and adjusted surplus was $209 million at June 30, 1993. Ohio National maintains a relatively low risk investment portfolio. The company's net investment yield has not fallen as rapidly as many other companies over the last several years of declining interest rates. This is mostly due to its block of well-performing mortgages and to the call protection built into the private placement portfolio. -0- 10/15/93 /CONTACT: Martha M. Butler, CFA Duff & Phelps Credit Rating Co., 312-368-3192/
CO: Ohio National Life Insurance Company; Ohio National Life Assurance
Corporation ST: Ohio IN: INS SU: RTG
LG -- NY032 -- 2713 10/15/93 11:45 EDT