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PMI MORTGAGE 'AAA' RATING AFFIRMED BY FITCH AFTER HURRICANE ANDREW -- FITCH FINANCIAL WIRE --

PMI MORTGAGE 'AAA' RATING AFFIRMED BY FITCH AFTER HURRICANE ANDREW
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Sept. 11 /PRNewswire/ -- PMI Mortgage Insurance Co.'s 'AAA' claims-paying ability rating is affirmed by Fitch after evaluating the impact of Hurricane Andrew on Allstate Insurance Co., PMI's immediate parent. Allstate has announced estimated after-tax losses of $700 million arising from claims in Florida and Louisiana due to damage from Hurricane Andrew on Aug. 24.
 PMI's rating reflects Fitch's evaluation of the mortgage insurer's capital adequacy under a number of rigorous stress scenarios. The scenarios call for potential capital infusions to PMI. Since PMI has a long-standing capital maintenance agreement with Allstate providing for unlimited support, it was appropriate to review Allstate's finances after Andrew's large catastrophic losses.
 This review confirmed PMI's strong capital adequacy and potential access to additional capital resources for several reasons. First, Allstate remains a well-capitalized insurer even after claims from Andrew. The property-casualty insurer had $5.5 billion of statutory capital at June 30. Though Andrew's losses will use some of this capacity, the insurer reported a very profitable first half of 1992 and should end the year with still over $5 billion in capital. Its strong franchise and fundamental outlook have not changed and its prospective finances remain good.
 Second, even after Andrew's full impact on Allstate's finances, Fitch estimates that PMI's potential need for capital under its severest stress test equals less than 3 percent of Allstate's capital. This scenario is mitigated by PMI's very strong results so far in 1992.
 And third, PMI continues to maintain a $300 million joint and several reinsurance agreement with two large international reinsurers as backup to the Allstate agreement. This alone provides more than double Fitch's estimated capital shortfall for PMI in an extreme mortgage default environment.
 -0- 9/11/92
 /CONTACT: David P. Wells of Fitch, 212-908-0517/ CO: PMI Mortgage Insurance Co. ST: IN: INS SU: RTG


AH -- NY035 -- 8486 09/11/92 12:52 EDT
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Publication:PR Newswire
Date:Sep 11, 1992
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