American Nat’l Ratings Stable

Standard & Poor’s Ratings Services lowered its counterparty credit and financial strength ratings on American National Insurance Co. (American National) and its coresubsidiaries to “AA” from “AA+.” The outlook was revised to stable from negative.

At the same time S&P raised its counterparty credit and financial strength ratings on American National subsidiary, Standard Life & Accident Insurance Co. (Standard), to “AA-” from “A+”, and affirmed its “A+” counterparty credit and financial strength ratings on Garden State Life Insurance Co. Both companies’ ratings are based in part on implied support from their parent, as strategically important parts of the American National group. The outlook on these ratings is stable.

The company has had a strong but somewhat weakened operating performance compared to prior years but American National’s capital adequacy is expected to remain extremely strong, with a capital adequacy ratio of more than 200 percent in 2002. For 2002, pretax income before realized gains and losses should increase somewhat from the 2001 level, exceeding $120 million. Profitability in the property/casualty and health insurance lines are expected to substantially improve, but continued expenses from infrastructure investments and reduced investment income will hold down overall results. Overall, sales should increase by 5 percent to 10 percent in 2001.