WOODLAND HILLS, CA — June 27, 2000 — Reflecting a dramatic business recovery from the devastation resulting from Los Angeles’ 1994 Northridge Earthquake, 21st Century Insurance Company was upgraded to an A+ rating by A.M. Best, the world’s oldest authoritative insurance rating and information source.
The new A+ (Superior) rating represents Best’s recognition of 21st Century’s significant improvement in the past five years. Best’s review of 21st Century said that the company’s new rating “reflects consistently strong operating trends, superior capitalization and leadership position in the California automobile insurance market. These strengths are derived from the group’s strong brand recognition, direct response marketing approach, emphasis on customer satisfaction and increasing use of technology.”
Best’s analysis went on to say “21st Century maintains a significant competitive expense advantage and an exceptional level of customer persistency relative to its peers.”
According to 21st Century officials, A.M. Best’s rating is another sign of the financial and business communities’ recognition of the company’s strong recovery from the Northridge earthquake, which forced it to liquidate approximately $500 million of its investment portfolio, and exhausted its capital
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resources. The company raised capital by borrowing $175 million in long-term bank debt, which was reduced to $45 million as of March 31, 2000. It also sold a major stake in (then-) 21st Century Insurance to American International Group, Inc. (NYSE: AIG), a leading U.S.-based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States.
Since the earthquake, 21st Century Insurance has received increasingly positive ratings from A.M. Best:
? 1995 – B- ? 1996 – B+ ? 1997 – A- ? 1998 – A- ? 1999 – A ? 2000 – A+
The company received more than 46,400 Northridge Earthquake-related claims, and paid out more than $1.1 billion, with less than 50 claims unresolved as of this date. The company’s earthquake losses alone were more than the entire profits the company had earned during its preceding 35 years of operation.
The company sustained considerable damage to its Woodland Hills headquarters and three claim facilities in the area, and was forced to set up temporary facilities for several days in its headquarters’ parking lot to meet customer needs following the earthquake.
According to President and CEO Bruce Marlow, “The rating upgrade to A+ announced by A.M. Best is a validation of the years of dedicated work by every one of our employees, who have been committed to returning our company to its position of financial strength. 21st Century is stronger than it has ever been, with $1.2 billion in assets, and has a clear direction to continue to grow to meet our customers’ needs, while providing strong shareholder value.”
21st Century Insurance (NYSE:TW), founded in 1958, is a pioneer of the customer-direct marketing of personal automobile insurance, which is now available in California, Arizona, Nevada, Oregon and Washington. The company also provides homeowners insurance in California.
21st Century Insurance is headquartered at 21st Century Plaza, 6301 Owensmouth Avenue, Woodland Hills, CA 91367.