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S&P Assigns Western National Assurance Co. 'BBpi' Rtg

22 December 1999

S&P Assigns Western National Assurance Co. 'BBpi' Rtg

    NEW YORK--Dec. 21, 1999--Standard & Poor's today assigned its double-'Bpi' financial strength rating to Western National Assurance Co.
    Western National Assurance Co. is a stock company based in Minneapolis, MN (domiciled in Washington) and licensed in 17 states and the District of Columbia. Its major lines of business are private passenger auto insurance and other liability (occurrence). The company, which distributes its products primarily through independent general agents, commenced operations in 1957. More than 95% of its business is in its major states of operation -- Washington, Minnesota, and Montana.
    The company is a member of Western National Insurance Group, a mid-sized insurance group (surplus of between $50 and $100 million).
    As a wholly owned and reinsured subsidiary of Western National Mutual Insurance Co., the company is assigned its parent's rating of double-'Bpi'.

    Major Rating Factors:

--   Capital adequacy, as measured by Standard & Poor's capital
     adequacy model, is more than 300%, which is extremely strong.
     Leverage, as measured by premium and liabilities to surplus, is
     conservative. The 1998 value was 1.6x.
--   The NAIC risk-based capital ratio is also strong at 711.9%.
--   In 1998, surplus decreased 5.1% to $5.8 million.
--   The company's five-year average return on revenue is very weak,
     at negative 18.7%.

    '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