A.M. Best Downgrades Rating of GMAC Insurance Group

Business Editors 
OLDWICK, N.J.--(BUSINESS WIRE)--June 12, 2003--A.M. Best Co. has
downgraded the financial strength rating to A (Excellent) from A+
(Superior) of GMAC Insurance Group (GMAC) (Michigan). The rating
outlook is stable. 
The rating reflects the diminished financial strength of the
ultimate parent company, General Motors Corporation, which is driven
by significant pension costs. As a result, GMAC may potentially be
burdened to support the ultimate parent company through increased
dividend demands. The lack of future cash generation by the parent to
fund the pension plan will further reduce the overall organization's
financial strength. 
Additional negative factors include the group's increasing
underwriting leverage and high investment leverage driven by exposure
to fluctuating market values that are related to the equity portfolio.
Surplus losses in recent years have been driven by the unfavorable
performance of the equity portfolio and parental dividends. These
losses, combined with premium growth, have resulted in gradually
increasing underwriting leverage. Further, a large portion of the
group's business, extended warranty and non-standard automobile is
exposed to downturns in economic conditions. 
Despite these negative factors, the Excellent rating reflects the
group's strong stand-alone capitalization, consistently solid
operating results, well-established market presence as one of the top
35 property/casualty insurers in the United States and a leading
provider of extended service contracts. These positive rating
attributes are derived from management's focused operating strategy,
extensive product knowledge, diversified product offerings and
multiple distribution channels. The group has consistently generated
capital through operating earnings, which reflects disciplined
underwriting, an efficient expense structure and a steady stream of
investment income. 
Through the affiliation with General Motors Corporation, the group
benefits from extensive penetration of GM dealerships with its
commercial automobile physical damage and core automobile extended
warranty products, as well as GMAC's brand name recognition,
widespread marketing network and direct sales support. In addition,
this rating reflects the group's diversification outside traditional
GM-related businesses, particularly its well established presence in
the non-standard automobile market through Integon. 
The financial strength rating has been downgraded to A (Excellent)
from A+ (Superior) for the following members of the GMAC Insurance
Group: 
--  Motors Insurance Corporation 
--  CIM Insurance Corporation 
--  GMAC Direct Insurance Company 
--  GMAC Insurance Company Online, Inc. 
--  Integon Casualty Insurance Company 
--  Integon General Insurance Corporation 
--  Integon Indemnity Corporation 
--  Integon National Insurance Company 
--  Integon Preferred Insurance Company 
--  Integon Specialty Insurance Company 
--  MIC General Insurance Corporation 
--  MIC Property and Casualty Insurance Corporation 
--  National General Assurance Company 
--  National General Insurance Company 
--  New South Insurance Company 
A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit A.M. Best's Web site at www.ambest.com.
 
 
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