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S&P Affirms Auto-Owners Insurance Co. 'AAApi' Rating

19 October 1999

S&P Affirms Auto-Owners Insurance Co. 'AAApi' Rating

    NEW YORK, Oct. 19 -- Standard & Poor's affirmed its
triple-'Api' rating on Auto-Owners Insurance Co., a mutual company based in
Lansing, Mich., and licensed in 28 states.
    Auto-Owners Insurance Co.'s major line of business is automobile
insurance.  It is a member of the Auto-Owners Insurance Group, a large
insurance group.  The company, which distributes its products primarily
through independent agents, commenced operations in 1916.
     Major Rating Factors:
     -- Although the company is a member of the Auto-Owners Insurance Group,
the rating does not include additional credit for implied group support.
     -- Capital adequacy, as measured by Standard & Poor's capital adequacy
model, is more than 300%, which is extremely strong.
     -- The company's premiums have grown steadily during a five-year period
at an average rate of 6%, with a well-diversified geographic market.
     -- Operating performance is modest, with the time-weighted return on
revenue from 1994-1998 at 12.2%.
    '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