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INTEGON $75 MILLION SENIOR NOTES RATED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --

 INTEGON $75 MILLION SENIOR NOTES RATED 'BBB+' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, July 15 /PRNewswire/ -- Integon Corp.'s new issue of $75 million senior notes is rated 'BBB+' by Fitch. The rating reflects Integon's profitable automobile insurance franchise, decreasing financial leverage, and adequate ability to service debt through cash flow. A risk is presented by Integon's concentration in virtually one line of business with high exposure to its home state of North Carolina. This is partly mitigated by the company's efforts to expand outside the state, which have begun successfully. The credit trend is stable.
 Integon has shown consistent profitability in writing nonstandard private passenger auto insurance. Focusing on this line has produced profit margins well above industry levels. Integon's combined underwriting ratio has averaged 86.8 percent for the past five years, over 21 percentage points better than the broad industry. Operating return on assets has been 7.73 percent for the same period.
 Integon's long history of writing nonstandard auto insurance is tempered by the company's only recent expansion, in 1987-88, outside of North Carolina. Approximately two-thirds of its premiums are still written in the state. However, by the end of 1992 Integon will be active in five states and will continue to reduce its geographic concentration. Longer term plans call for controlled growth in five additional states.
 In addition, the continued financial health and viability of North Carolina's residual market facility is important since it assumes a large portion of Integon's direct business. Legislation passed in 1987 resulted in the facility going from a deficit to a surplus. Due to the large size of the nonstandard market in North Carolina, maintenance of positive surplus is a keen interest among regulators and legislators.
 Integon's invested asset quality is high and loss reserve development appears to be improving. Most of Integon's historical adverse development in the 1980's is related to discontinued lines of business that have been carefully reviewed. Recent actuarial opinions indicate a likely modest redundancy in current reserves.
 Financial leverage has declined substantially since the company's leveraged acquisition in 1990. Debt-to-capital has fallen to 41 percent at March 31 from 85 percent at year-end 1990. This is the result of the Integon's public equity offering and sale of life insurance operations, both earlier this year. Most importantly, current debt levels should be comfortably serviced through dividend and tax sharing payments from insurance subsidiaries. Though upstreamed dividends are subject to statutory limits, adequate levels appear available under modest operating outlooks.
 -0- 7/15/92
 /CONTACT: David P. Wells, 212-908-0517 or Brady N. Tournillon, 212-908-0519, both of Fitch/
 (IN) CO: Integon Corp. ST: North Carolina IN: INS SU: RTG


SM -- NY102 -- 9760 07/15/92 17:28 EDT
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Publication:PR Newswire
Date:Jul 15, 1992
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