S&P Affirms Progressive Hawaii Insurance Corp. 'AApi' Rating

    NEW YORK, March 6 Standard & Poor's today affirmed its
double-'Api' financial strength rating on Progressive Hawaii Insurance Corp.
    The rating is based on the company's participation in a reinsurance
agreement with an affiliate, Progressive Casualty Insurance Co. (financial
strength rating double-'Api'), to which it cedes 90% of all premiums, loss and
loss adjustment expense, and underwriting expense. The two companies also have
a joint management services agreement.
    Both companies are wholly owned by The Progressive Corp. , an
insurance holding company domiciled in Ohio (counterparty credit rating
single-'A'-plus), of which the combined subsidiary operations form the fourth
largest writer of private passenger auto and personal-use vehicles
(motorcycles, recreational vehicles, and snowmobiles) in the U.S., with
reported surplus of $2.2 billion at year-end 2000.
    Progressive Hawaii Insurance Corp. (NAIC: 10067) mainly writes private
passenger auto coverage, distributed primarily through independent general
agents and direct marketing. Based in Mayfield Village, Ohio (domiciled in
Hawaii) and licensed in Hawaii and Tennessee, it derives all its business from
Hawaii. The company began business in 1994.
    Policyholder surplus decreased about 8% in the first nine months of 2000
to $3.2 million, from $3.4 million at year-end 1999.
    Ratings 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. Ratings with a 'pi'
subscript 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.