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S&P Assigns American Mercury Insur Co `BBBpi' Rating

30 July 1999

S&P Assigns American Mercury Insur Co `BBBpi' Rating

    NEW YORK--Standard & Poor's--July 28, 1999-- Standard & Poor's today assigned its triple-'Bpi' financial strength rating to American Mercury Insurance Co.
    American Mercury, which is headquartered in Oklahoma City, Okla., is licensed in 34 states and commenced operations in 1962. Its major line of business is private passenger automobile insurance. As of Dec. 30, 1996, the company became a member of Mercury General Group, the largest independent agency automobile carrier in California.

     Major rating factors include:
--   Standard and Poor's believes that the company is a strategically
     important member of the Mercury General Group, and therefore
     group support is a factor in the rating.

--   Capitalization is extremely strong as indicated by Standard &
     Poor's capital adequacy ratio of 293%.

--   Return on assets has displayed volatility over the past five
     years, as indicated by a risk-adjusted return on assets of
     negative 7%. 

--   The company has a history of volatility in premium income. 

    '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