S&P’s Revises GE P/C Companies Outlook to Negative; Ratings Affirmed

May 30, 2003

Standard & Poor’s has revised its outlook on GE Property & Casualty Insurance Co., GE Casualty Insurance Co., GE Auto & Home Assurance Co., and GE Indemnity Insurance Co. (collectively referred to as GE PC) to negative from stable because of the uncertainty of continued investment for growth from its parent in this competitive market, given GE PC’s modest contribution to its parent’s total revenues and net income.

Standard & Poor’s also said that it affirmed its ‘AA-‘ counterparty credit and financial strength ratings on GE PC.

“The ratings are based on the group’s extremely strong capitalization,
improving operating performance, and expanding distribution model, partially offset by its modest business position,” said Standard & Poor’s credit analyst Grace Osborne.

The group is considered strategically important to its parent, GE Financial Assurance Holdings Inc. (GE Financial), and GE PC receives technical support from GE Financial for its investment and treasury functions. GE PC’s customer base and product lines add diversification to GE Financial’s consumer base, and GE PC’s direct marketing technical expertise provides additional distribution capabilities to GE Financial.

GE PC primarily provides automobile coverage for customers with an average age of 60. Standard & Poor’s believes this relatively narrow customer niche exposes the insurer to competitive conditions in the marketplace.

In the medium term, Standard & Poor’s expects GE PC’s customer base to expand as the group expands its E-Commerce business and takes greater advantage of customer synergies with other GE Financial operations.

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