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S&P Affirms Yosemite Insurance Co. 'Api' Rtg

8 November 1999

S&P Affirms Yosemite Insurance Co. 'Api' Rtg

    NEW YORK--Standard & Poor's--Nov. 8, 1999-- Standard & Poor's today affirmed its single-'Api' financial strength rating on Yosemite Insurance Co.
    Yosemite Insurance Co. is a stock company based in Evansville, Ind., and licensed in 42 states. Its major lines of business are inland marine and personal auto insurance, which it provides through the consumer finance network of American General Finance Corp. The company commenced operations in 1964.
    The company is a subsidiary of American General Finance Corp. (counterparty credit rating single-'A'-plus) and a member of the American General group of companies, a large financial services group.



     Major Rating Factors:

--   Standard & Poor's believes the company is strategically important
     to its parent, American General Finance Corp., and group support
     is therefore a factor in the rating.

--   Capital adequacy, as measured by Standard & Poor's capital
     adequacy model, is over 300%, which is extremely strong.

--   The company's volatile returns, with return on assets ranging
     from 6.4%-13.2% since 1994, is a limiting factor.

--   The company displays more volatility in its premium revenues than
     most higher rated insurance companies. Net premiums written
     increased 0.1% in 1998 to $46.9 million while surplus increased
     25.1% to $122.0 million.

--   This company's retained earnings, as measured by unassigned
     surplus to assets of 53.7%, is considered good.



    '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