WEISS RATINGS

Property and Casualty Insurers Post $5.5 Billion Profit
in First Quarter 2002

PALM BEACH GARDENS, Fla., September 23, 2002 - The nation's property and casualty insurers reported a $5.5 billion profit for the first three months of 2002, representing a $260 million, or 4.9 percent, increase over the same period last year, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

Insurers showing the largest year-over-year increase in net income include:

Company Domicile
State
Weiss
Safety
Rating
Net Income (Loss) ($Mil)
1st Qtr
2002
1st Qtr
2001
Change
State Farm Mutual Automobile Ins. Co. Ill. A- 334.7 156.1 178.6
Metropolitan Property & Cas. Ins. Co. R.I. B+ 22.1 (131.8) 154.0
Liberty Mutual Ins. Co. Mass. B 27.7 (81.1) 108.7
United Services Automobile Asn. Texas A+ 121.0 14.3 106.6
St. Paul Fire & Marine Ins. Co. Minn. B 108.7 19.7 89.0
Anthem Ins. Companies Inc. Ind. B- 94.3 10.2 84.0
Lyndon Property Ins. Co. Mo. C+ 84.3 1.6 82.7
Nationwide Mutual Ins. Co. Ohio C+ 23.6 (55.6) 79.2
American Continental Ins. Co. Mo. C .429 (69.2) 69.6
Auto-Owners Ins. Co. Miss. A+ 54.0 (13.8) 67.8
Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

"Property and casualty insurers quickly reversed last year's loss and seem positioned to return to profitable levels this year," commented Melissa Gannon, vice president of Weiss Ratings, Inc. "Years of strong earnings and frequent rate increases have allowed the industry to quickly absorb losses from catastrophic events."

Investment Income Falls

Market volatility during the first quarter contributed to a $2.4 billion, or 85.7 percent, decline in net realized capital gains, from $2.8 billion in 2001 to $400 million in 2002. The dismal market performance also caused the industry to suffer a $145 million drop in investment income compared to the same period last year. However, investment income was high enough to offset underwriting losses of $3.3 billion.

Industry Capital Increases

The industry's capital was up $11.2 billion, or 3.0 percent, to $378.5 billion at March 31, 2002 from $367.3 billion at March 31, 2001. A contributing factor was the increase in surplus notes, subordinated debt instruments included in statutory capital, which were up $2 billion, from $6.1 billion to $8.1 billion during the same period.

Notable Upgrades and Downgrades

Among the 2,264 property and casualty insurers reviewed by Weiss, 16 were upgraded and 20 were downgraded. Notable upgrades include:

• Eagle Ins. Co. (N.J.) from E- to E
• Indiana Old National (Vt.) from E+ to D-
• Westchester Surplus Lines (Ga.) from D to D+

Notable downgrades include:

• Progressive Premier Ins. Co. of IL (Ill.) from B to B-
• Progressive Universal Ins. Co. of IL (Ill.) from B to B-
• St. Paul Ins. Co. of IL (Ill.) from B to B-

The Weiss Safety Ratings are based on an analysis of a company's risk-adjusted capital, reserve adequacy, profitability, 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 insurance companies, banks, and brokerage firms. Weiss also rates the risk-adjusted performance of more than 11,000 mutual funds and more than 7,000 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 www.WeissRatings.com, or starting at $15 by calling 800-289 9222.


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