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S&P Assigns Mercury Casualty Co. 'Api' Rating

6 August 1999

S&P Assigns Mercury Casualty Co. 'Api' Rating

    NEW YORK--Standard & Poor's CreditWire--Aug. 5, 1999--Standard & Poor's today assigned its single 'Api' financial strength rating to Mercury Casualty Co.
    The Los Angeles, Calif.-based company, which commenced operations in 1962, is licensed in California and Florida. Its major line of business is personal automobile insurance. It is the leading company of the Mercury General Group, the largest independent agency auto writer in California.

    The major rating factors include:

    -- Capitalization is extremely strong with a Standard Poor's capital adequacy ratio of more than 300%.

    -- The company's operating performance is very strong, with a time-weighted average return on revenue of 19.5%.

    -- The company's business is more concentrated with regards to its geographic coverage and product lines than most higher-rated companies.

    'Pi' ratings, denoted with a pi subscript, are insurer financial strength ratings based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a pi subscript. Pi ratings are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a pi subscript are not subject to potential CreditWatch listings.
    Ratings with a pi subscript generally are not modified with 'plus' or 'minus' designations. However, such designations may be assigned when the insurer's financial strength rating is constrained by sovereign risk or the credit quality of a parent company or affiliated group, Standard & Poor's said. ---CreditWire