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S&P Assigns Germania Insurance Co. 'BBBpi' Rating

9 August 1999

S&P Assigns Germania Insurance Co. 'BBBpi' Rating

    NEW YORK--Aug. 6, 1999--Standard & Poor's today assigned its triple-'Bpi' financial strength rating to the Germania Insurance Co.
    The Brenham, Texas-based company is a licensed insurer whose major lines are private passenger automobile, homeowners, fire, allied lines, and inland marine protection. The company is 100%-owned by the Germania Farm Mutual Insurance Assn., and commenced operations on Nov. 29, 1978.

    The major rating factors include:

    -- Earnings are highly volatile due to adverse weather conditions in the past few years in Texas.

    -- The company displays a narrow product and geographic scope. The company only writes business in Texas. Economic and regulatory risk associated with the direct business written within such a narrow scope are rating factors.

    -- Capitalization, as measured by Standard & Poor's capital adequacy model, is extremely strong at more than 300%.

    -- Liquidity, as measured by Standard & Poor's liquidity model, is good at 115%.

    -- Using Standard & Poor's methodology for analyzing insurance groups, this company may not be rated higher than its parent, Germania Farm Mutual Insurance Assn. (triple-'Bpi' financial strength rating).

    '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