WEISS RATINGS

Life Insurers Return to Double-Digit Profit Growth
17 Percent During First Half of 1999, Compared to One Percent Increase Last Year

PALM BEACH GARDENS, Fla., November 17, 1999 - The nation's life and health insurers returned to double-digit growth in their net profits in the first half of 1999, according to a study by Weiss Ratings, Inc., the only independent provider of insurance company ratings and analyses. The net profits of the 1,199 life and health insurers reviewed by Weiss rose 17.4 percent to $13.5 billion in the first half of 1999 from $11.5 billion for the same period of 1998.

"This represents a significant improvement in contrast to a mediocre one percent gain in net profits in 1998," commented Martin D. Weiss, chairman of Weiss Ratings, Inc. "The continued growth in variable annuities appears to be supporting the industry nicely."

As a result, the number of "recommended companies" (i.e., those earning a Weiss Safety Rating of B+ or higher) has grown from 107 to 109, representing 8.8 percent of all rated life and health insurers. The new companies added to the Weiss Recommended List are Amica Life Insurance Company (Lincoln, R.I.), Fidelity Investments Life Insurance Company (Utah), and Primerica Life Insurance Company (Mass.), all upgraded from B to B+ based on second quarter 1999 data. First SAFECO National Life Insurance Company of New York (East Syracuse, N.Y.) dropped off the recommended list when it was downgraded from B+ to B.

Meanwhile, however, five insurers fell to D+ ("weak"), dropping them into a range considered "vulnerable" by Weiss. They are American Medical and Life Insurance Company (Hicksville, N.Y.), Occidental Life Insurance Company of North Carolina (Waco, Texas), Peninsular Life Insurance Company (Raleigh, N.C.), Pioneer Security Life Insurance Company (Waco, Texas), and Security Life and Trust Insurance Company (Dallas, Texas).

Industry Capital Surpasses $200 Billion

Growth of capital in the industry slowed to 4.7 percent during the first half of 1999 compared to 14.3 percent during the same period in 1998, but it was enough to push the total beyond $200 billion to $206.5 billion. This is up from $197.2 billion at June 30, 1998 and $172.6 billion at June 30, 1997.

Annuity Deposits Continue to Climb

Annuity deposits through June 30, 1999 were 24.5 percent higher than for the same period in 1998, up from $84 billion to $105 billion. While this was a slight decrease in the rate of growth, compared to 30.5 percent from 1997 to 1998, it nonetheless represents a continuation of the rapid growth in annuity sales and asset values.

Notable Upgrades and Downgrades

Among the insurers reviewed by Weiss, 27 were upgraded and 28 were downgraded. Notable upgrades include:

Notable upgrades include:
Company Previous
Rating
New
Rating
First AUSA Life Insurance Company (MD.) C+ B-
Charter National Life Insurance Company (St. Louis, MO.) C B-
Academy Life Insurance Company (MO.) C+ B-
Notable upgrades include:
Company Previous
Rating
New
Rating
Guarantee Life Insurance Company (Omaha, Neb.) A- B+
Indianapolis Life Insurance Company (Indianapolis, Ind.) B- C+
West Coast Life Insurance Company (San Francisco, Calif.) B- C+

The Weiss ratings are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth,strength of affiliate companies, and risk diversification.

Weiss issues safety ratings on more than 16,000 financial institutions, including HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, banks, and brokers. Weiss also rates the Y2K preparedness of many insurers and banks, as well as the risk-adjusted performance of more than 5,000 mutual funds. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

Consumers needing more information on the financial safety of a specific company may purchase a rating or analysis directly from Weiss for as little as $15 by calling 1-800-289-9222. Weiss' ratings are also available at many public libraries.


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