---

Standard & Poor's Rates Interinsurance Exchange of Auto Club of S. CA

16 November 1998

Standard & Poor's Rates Interinsurance Exchange of the Auto Club of Southern California

    NEW YORK, Nov. 13 -- Standard & Poor's today assigned its
double-'Api' (Very Strong) insurer financial strength rating to Interinsurance
Exchange of the Automobile Club of Southern California.
    The company provides insurance to members of The Automobile Club of
Southern California, the largest affiliate of the American Automobile
Association.  The Interinsurance Exchange is licensed and operates in
California and Arizona, and offers auto, homeowners, boat and personal excess
liability insurance.  The company commenced operations in 1912.

    The following factors were incorporated in the double-'Api' rating:
    -- With $1.4 billion in policyholders' surplus as of June 30, 1998, the
       company has a major presence in its market.
    -- The Interinsurance Exchange's capital position is extremely strong at
       over 300%, as measured by Standard & Poor's capital adequacy model.
    -- Operating performance is very strong, with return on revenue averaging
       22% from 1992 to 1997.
    -- The company is more likely to be affected by adverse business
       conditions than insurers with higher ratings due to its high geographic
       and product line concentrations.

    '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.