S&P Withdraws Philadelphia Ins Co. Ratings

Standard & Poor’s has withdrawn its “A” counterparty credit and financial strength ratings on Philadelphia Insurance Co. and Philadelphia Indemnity Insurance Co., members of the Philadelphia Insurance group of companies.

The ratings were withdrawn at the company’s request. The Prior ratings were based on the following:

Philadelphia has adopted a successful niche strategy, enabling it to maintain growth rates significantly above the industry for several consecutive years. The group has recently increased its size and scope substantially, with double-digit organic growth and the 1999 acquisition of mobile home and homeowners’ writer, Liberty American Insurance Group, Inc. (Liberty American), leading premium volume to triple in the last five years. 2000 proved to be another year of strong growth, with net premiums increasing by 35 percent to $264 million.

Operating performance has been very strong, with the five-year combined ratio at 88 percent and ROR averaging 16 percent.

Capitalization remains strong, as indicated by a capital adequacy ratio of 141 percent in 2000. This represents a decline from ratios of previous years, however, and indicates the greater utilization of capital as the group increases premium volume.

Financial flexibility is good, with the holding company benefiting from its access to the capital markets.