WEISS RATINGS

Property and Casualty Insurers' Premiums Surge $28 Billion
In First Three Quarters of 2002
Industry Reports $11 Billion Profit

PALM BEACH GARDENS, Fla., March 4, 2003 - Premiums earned by the nation's property and casualty insurers surged $27.8 billion, or 12 percent, during the first three quarters of 2002, to $258.7 billion from $230.9 billion during the same period in 2001, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

The jump in premiums propelled the industry's profit to $10.8 billion during the first nine months of 2002, compared to an $814 million loss in the same period the previous year. Despite the overall increase in profits, 32 percent of companies lost money for the period. Insurers reporting the largest year-over-year increases in net premiums were:

Company Headquarters Domicile
State
Weiss
Safety
Rating
Net Premiums Earned
($Bil)

3rd Qtr
2002
3rd Qtr
2001
$
Change
State Farm Mutual Auto Ins. Co Bloomington, Ill. Ill. B+ 21.6 19.3 2.3
Continental Casualty Co. Chicago, Ill. Ill. C 3.2 1.9 1.4
Zurich American Ins. Co. New York, N.Y. N.Y. B 4.1 3.1 1.0
Allstate Ins. Co. Northbrook, Ill. Ill. A- 16.1 15.2 .9
National Union Fire Ins. Co. New York, N.Y. Pa. B+ 2.9 2.0 .8
Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

"Increased premiums of this magnitude indicate that the underwriting cycle may be nearing its peak, which means that rate increases experienced for the past three years could start slowing down," said Melissa Gannon, vice president of Weiss Ratings, Inc. "If, at the same time, investment losses continue to mount, companies may find themselves fighting to preserve financial stability."

Industry Suffers 54 Percent Decline in Capital Gains

Property and casualty insurers suffered a $3.7 billion, or 54 percent, decline in capital gains during the first nine months of 2002, to $3.1 billion from $6.8 billion during the same period in 2001. In analyzing the industry's capital gains (profits earned from the sale of investments), Weiss found that five companies reported gains greater than $100 million, while one insurer, Hartford Fire Insurance Company, contributed $3.9 billion. Excluding Hartford Fire's gain, which represents profits on the exchange of shares in affiliated companies, property and casualty insurers lost $830.8 million on sales of investments, representing a $7.7 billion decline in capital gains.

Insurers reporting the largest year-over-year decreases in capital gains include:

Company Headquarters Domicile
State
Weiss
Safety
Rating
Capital Gain (Loss)
($Mil)

3rd Qtr
2002
3rd Qtr
2001
$
Change
Continental Casualty Co. Chicago, Ill. Ill. C -150.8 648.1 -798.9
United Services Auto Assn. San Antonio, Texas Texas A+ -653.4 -64.2 -589.2
National Indemnity Co. Omaha, Neb. Neb. B+ 503.7 995.5 -491.8
American Family Mutual Ins. Co. Madison, Wis. Wis. B+ -56.3 354.4 -410.7
St. Paul Fire & Marine Ins. Co. St. Paul, Minn. Minn. B -78.0 305.6 -383.6
Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

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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