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INTEGON CORP. $75 MILLION SENIOR NOTES AFFIRMED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Aug. 27 /PRNewswire/ -- Integon Corp.'s `BBB+' $75 million senior notes are affirmed by Fitch. The credit trend is stable. The rating reflects Integon's profitable automobile insurance operation, successful niche strategy, decreasing financial leverage, and adequate ability to service debt through cash flow. A continuing risk is that the majority of the cash flow is derived from its insurance subsidiaries and subject to state insurance department restrictions on dividends. Other concerns are a single-product focus and geographic concentration.
 Integon's primary business is writing nonstandard private passenger auto insurance. Their expertise with this line has produced superior profitability margins. Integon's combined ratio averaged 86.0 percent for the last five years, more than 15 percentage points better than the average for companies writing this line and more than 24 points better than the property and casualty industry. Operating return on assets was 8.0 percent on a consolidated GAAP basis over the same period.
 Integon implemented a diversification strategy several years ago to grow its premium base in states other than its traditional home market of North Carolina. The state currently accounts for about 60 percent of premium volume, excluding the North Carolina Reinsurance Facility, much reduced from even 1991 levels. Particular growth was realized in Georgia, where more than $26 million in 1992 premium volume was generated in that state's first year of operation. It also operates in Virginia, Tennessee, Florida, and most recently Ohio.
 North Carolina regulations restrict dividends of insurance companies to the lesser of prior 12 months income from operations or 10 percent of the prior year end's surplus, minus any dividends paid during the preceding 12 months. Integon has received permission to dividend amounts greater than would be allowed under the restrictions. These extraordinary dividends have totaled $40.4 million since the law was enacted in 1991, including $30 million in April 1993.
 As of June 30, 1993, debt-to-capital had decreased to 36 percent from a high of 83 percent at year-end 1990. This results from a $101.8 million public equity sale in 1992 and continuing profitable operations. Through 1993's first six months, the insurance subsidiaries had $120.4 million of net premium volume, for a 2.2 times premium-to- surplus ratio, and an 83 percent combined ratio. Asset quality is high.
 -0- 8/27/93
 /CONTACT: Laurance M. Ring, 212-908-0673, or Lygia X. Campbell, 212-908-0695, both of Fitch/


CO: Integon Corp. ST: New York IN: SU:

MP -- NY027 -- 6593 08/27/93 11:49 EDT
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Publication:PR Newswire
Date:Aug 27, 1993
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