NRMA RATING AFFIRMED BY S&P AFTER SGIO BID

Business Editors 
MELBOURNE--(BUSINESS WIRE)--Sept. 29, 1998--Standard & Poor's
CreditWire 9/29/98--Standard & Poor's today affirmed its
double-'A'-plus insurer financial strength and counterparty credit
ratings on NRMA Insurance Ltd. (NRMAI), following the announcement of
an intended A$371 million takeover bid of SGIO Insurance Ltd. (SGIO)
to rival Wesfarmers Ltd.'s bid. 
The single-'A'-minus rating on SGIO remains on CreditWatch with
developing implications, reflecting uncertainties surrounding its
future ownership. The affirmation of the rating on NRMAI reflects the
expected limited impact on the company's financial structure, which
would result from a successful bid. Further, NRMAI's business profile
would benefit from the acquisition of SGIO through the addition of a
significant presence in Western and South Australia to NRMAI's
existing dominant position in New South Wales. 
The existing CreditWatch with developing implications on SGIO
(placed Sept. 11) remains; however, the likely outcome in the event of
a successful bid by NRMAI is either an affirmation or an upward rating
movement. The extent of any rating upgrade would be dependent on the
resultant financial and operational structure of NRMAI and SGIO, the
degree of integration of the two businesses, and level to which NRMAI
might support SGIO. The rating on NRMAI was last affirmed following
release of the fiscal 1998 results, which were consistent with NRMAI's
rating given the company's very strong business and financial
condition. The present double-'A'-plus rating is supported by: 
--   Extremely strong level of capitalization, underpinned by total 
equity of A$2,293.3 million and solvency of 124.5% at June 30 
1998, would enable the purchase of SGIO with minimal impact. 
While the mutual status places some limitation on accessing 
external capital, this is ameliorated by the existing level of 
capitalization, ability to generate retained earnings, and recent 
proven ability to raise debt; 
--   Acceptable operating performance in the context of a difficult 
investment environment; and 
--   Very strong business position with dominant market share in its 
home state of NSW, and its chosen lines of business. 
The acquisition of SGIO would be consistent with NRMAI's strategy
to improve geographical diversification, and SGIO's portfolio is
broadly consistent with NRMAI's lines of business. Standard & Poor's
expects that measures aimed at improving both underwriting and
investment performance should continue to underpin a general
improvement in NRMAI's operating results in the long term. NRMAI's
claims provisioning and financial structure is expected to remain very
strong in the near to medium term, while remaining heavily influenced
by investment market performance, Standard & Poor's said.
---CreditWire, Copyright 1998, Standard & Poor's Rating Services
 
 
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