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S&P Affirms Auto-Owners Life Ins Co 'Api' Rating

19 October 1999

S&P Affirms Auto-Owners Life Ins Co 'Api' Rating

    NEW YORK--Standard & Poor's--Oct. 19, 1999--Standard & Poor's today affirmed its single-'Api' rating on Auto-Owners Life Insurance Co., a stock company based in Lansing, Mich., and licensed in 28 states.
    The company's major lines of business are individual annuity, individual life, group annuity, and group pension. It is a member of the Auto-Owners Insurance Group, a large insurance group and is a wholly owned subsidiary of Auto-Owners Insurance Co. (rated triple-'Api'). The company, which represents itself through independent agents, commenced operations in 1966.

    Major Rating Factors:

    -- Capitalization is extremely strong, more than 300%, as measured by Standard & Poor's capital adequacy model and, as such, is a strength for the rating.
    -- Although the company is a member of the Auto-Owners Insurance Group and affiliated with Auto-Owners Insurance Co., the rating does not include additional credit for implied group support.
    -- The company has displayed stability in its earnings, a positive rating factor.
    -- The company's liquidity is strong at 178%, as measured by Standard & Poor's liquidity model.
    -- The company's premium revenue is more volatile than most higher rated companies.
    '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