WEISS RATINGS

PALM BEACH GARDENS, Fla., February 25, 2002 - Profits of the nation's life and health insurers declined more than $11 billion, or 57 percent, during the first nine months of 2001, compared to the same period in 2000, according to Weiss Ratings, Inc., the nation's only independent provider of ratings and analyses of financial services companies, mutual funds and stocks.

Similarly, the industry's return on assets fell 57 percent to 0.28 percent, and its return on equity fell 58 percent to 3.9 percent. The profit declines are primarily a result of a $3.3 billion capital loss on the sale of invested assets as of September 30, 2001, compared to a $2.4 billion capital gain as of September 30, 2000.

"The industry saw significant losses as a direct result of an investment strategy that is too risky," said Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc. "Insurers should not be putting policyholders' money into stocks and junk bonds that unwittingly expose them to unnecessary risk. In any economy investment grade bonds are a safer vehicle."

Companies still holding a high level of common stock relative to their capital may be vulnerable to investment losses in a further market decline. These include:

¹ Common Stock Holdings include investments in Affiliated Common Stocks.

² For the purposes of this ratio, "capital" is defined as capital and surplus plus asset valuation reserve.

Capital and Surplus Decline During the Period

Life and health insurers also suffered a 2.6 percent reduction in capital and surplus, from $225.7 billion at September 30, 2000 to $219.8 billion at September 30, 2001. This decline in capital and surplus resulted primarily from a $12.3 billion unrealized capital loss.

"The ability of a company to withstand losses during a declining market is critical to its financial stability," commented Dr. Weiss. "Life and health insurers can improve their ability to weather bad times by investing more conservatively, building their capital, or both."

Among the 949 companies reviewed by Weiss using third quarter 2001 data, six were upgraded and three were downgraded. Companies upgraded were:

Downgraded companies were:

The Weiss Safety 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 15,000 financial institutions, including life and health insurers, HMOs, Blue Cross Blue Shield plans, property and casualty insurers, banks and brokers. Weiss also rates the risk-adjusted performance of more than 11,000 mutual funds and more than 9,000 stocks. 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 can purchase a rating and summary analysis for as little as $7.95 through the Weiss Ratings website, www.WeissRatings.com, or starting at $15 by calling 800-289-9222.