DUFF & PHELPS: BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA CLAIMS PAYING ABILITY RATING RATED 'AA'
CHICAGO, July 21 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has rated the claims paying ability of Business Men's Assurance Company of America (BMA) `AA' (Double-A). The rating reflects the company's strong capitalization, good asset quality, and strength and support of its ultimate majority parent, Assicurazioni Generali S.P.A. (Generali). BMA is a stock life insurance company based in Kansas City and domiciled in Missouri with total admitted assets of $1.2 billion and adjusted surplus of $193 million at March 31, 1993. BMA's ultimate majority parent is Generali, the largest insurance company in Italy and the third largest insurance company in the world. Generali owns the controlling share of BMA. A minority share is held by a large European financial services company. BMA was purchased in 1990 as Generali's entry in the U.S. life insurance market. BMA will serve as the vehicle for growth in the United States and as a long-term investment for Generali. BMA has three major business units, individual, group life and health, and reinsurance. In addition, BMA began selling guaranteed investment contracts (GICs) in 1992. Individual operations focuses on selling life, health, and annuity products in rural and suburban areas through a career agency force. This line of business has been the primary earnings contributor to the company throughout its history. Group life and health operations sells products primarily to employers with under 1,000 employees through employee benefits brokers. Reinsurance markets mostly life reinsurance to medium-sized insurers. Since February 1992, BMA has been implementing a measured entry into the GIC market. The company expects to grow this line slowly and has set production caps. BMA is strongly capitalized with an operating leverage ratio of 5.40 times at March 31, 1993. Operating leverage is expected to increase with the planned growth of GIC liabilities. Profitability has been strong with return on admitted assets and return on adjusted surplus averaging 2.72 percent and 9.1 percent, respectively, over the last five years. BMA has strong asset quality. Bonds represented 57 percent of total invested assets at March 31, 1993. Below investment grade securities made up less than one percent of the bond portfolio. Mortgage loans comprised 27 percent of total invested assets at quarter- end. Loans delinquent, in process of foreclosure, modified, and foreclosed made up 9.15 percent of the mortgage loan portfolio vs. 18.48 percent for the industry generally. Equity securities represented 5 percent of total invested assets and included mostly preferred stock issues. The remainder of invested assets was made up of policy loans, cash, and foreclosed real estate at 6 percent, 4 percent, and 1 percent, respectively. -0- 7/21/93 /CONTACT: Julie A. Burke of Duff & Phelps Credit Rating Co., 312-368-3158/
CO: Business Men's Assurance Company of America ST: IN: INS SU: RTG
CK -- NY047 -- 3903 07/21/93 11:28 EDT
|Printer friendly Cite/link Email Feedback|
|Date:||Jul 21, 1993|
|Previous Article:||DUFF & PHELPS: TRAVELERS CORP. SENIOR AND SUBORDINATED DEBT RATINGS REAFFIRMED; PREFERRED STOCK RATING REAFFIRMED|
|Next Article:||ICC TECHNOLOGIES RECEIVES ORDERS FOR TWO MORE AIR CONDITIONING SYSTEMS FOR SHOPRITE SUPERMARKETS|