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DUFF & PHELPS: MANHATTAN NATIONAL LIFE INSURANCE COMPANY CLAIMS PAYING ABILITY RATED 'A'

 CHICAGO, Nov. 9 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has reaffirmed the 'A' (Single-A) claims paying ability rating of Manhattan National Life Insurance Company (Manhattan National). The rating reflects Manhattan National's improving profitability and good underwriting results, high quality liquid investment portfolio, and conservative operating leverage. These positive factors are offset by the company's lack of consistent profitability in the last five years due to the recapture of surplus relief, the company's moderate size, and the portion of annuity liabilities that are not subject to market adjustment or surrender charges. Furthermore, the rating considers the volatile earnings in recent years of Manhattan National's ultimate parent Pioneer Financial Services, Inc. (NYSE: PFS)(PFS), as well as the uncertainties under healthcare reform faced by PFS, a mid-sized provider of individual health insurance.
 Manhattan National is a stock company owned by Pioneer Life Insurance Company of Illinois. Pioneer Life is a wholly owned subsidiary of Pioneer Financial Services Inc. PFS had GAAP assets of $1.1 billion and stockholders' equity of $65 million at September 30, 1993. Manhattan National has a 36-year history of successfully marketing individual non-participating life insurance products and is not in the pension or group life and health insurance business. The company has admitted assets of $268 million and adjusted surplus of $27 million at September 30, 1993.
 Manhattan National earned a $227 thousand net operating gain on a statutory basis in 1992. The company's five-year average return on admitted assets was 0.91 percent on a before tax and policyholder dividend basis, while the five year average after tax return on adjusted surplus was 6.7 percent. Manhattan National paid off all surplus relief in 1992. Excluding the impact of surplus relief, the company has posted a statutory profit in each of the last four years and expects improved profits in 1993. The company's operating leverage (adjusted liabilities/adjusted surplus) of 8.84 times at September 30, 1993, is conservative compared to peer companies with a similar mix of business, and will probably be maintained within the current range to cushion the surplus strain of growth.
 Manhattan National maintains high asset quality and strong liquidity. The company holds no mortgages on real estate, real estate, or equity investments, and it does not purchase below investment grade securities. Bonds made up 87 percent, cash and equivalents 9 percent, and policy loans 4 percent of invested assets as of yearend 1992.
 -0- 11/9/93
 /CONTACT: John F. Bareiss of Duff & Phelps Credit Rating Co., 312-368-3162/
 (PFS)


CO: Manhattan National Life Insurance Company; Pioneer Life Insurance
 Company of Illinois; Pioneer Financial Services Inc. ST: Illinois IN: INS SU: RTG


SH -- NY053 -- 2207 11/09/93 10:57 EST
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Publication:PR Newswire
Date:Nov 9, 1993
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