21st Century Insurance upgraded

Press Release



WOODLAND HILLS, Calif.--(BUSINESS WIRE)--Jan. 6, 2005--21st Century Insurance Group (NYSE:TW) today announced that Standard & Poor's Rating Services upgraded its outlook on the company from "negative" to "stable." Standard & Poor's also affirmed its "A+" counterparty credit and financial strength ratings on 21st Century Insurance Company and 21st Century Casualty Company and affirmed its "BBB+" counterparty and senior debt ratings on the holding company, 21st Century Insurance Group.





"The revised outlook reflects the diminishment of concerns regarding 21st Century's ambitious growth strategy as demonstrated by strong financial results accompanying very strong growth, providing evidence that the quality of the new business is comparable with the historical book," explained Standard & Poor's credit analyst Steven Ader. "Positive progress in IT system development work and the closing of over 90% of SB 1899 Northridge earthquake claims also support the revised outlook."



"We have demonstrated strong progress on S&P's operating topics and have greatly improved the financial condition of the Company. From the end of 2001 through the third quarter of 2004, we increased invested assets from $856 million to $1.4 billion, increased loss reserves from $349 million to $486 million, increased stockholders equity from $659 million to $754 million while growing revenue over 40% and steadily improving the combined ratio," said Bruce Marlow, President and Chief Executive Officer of 21st Century Insurance. "With an S&P capital adequacy ratio of 243% at year-end 2003 and a premium to statutory surplus ratio of 2.2:1 at the end of the third quarter of 2004, we are well prepared to support growth in California and our new markets of Illinois, Indiana, Ohio and Texas. With state of the art computer systems scheduled to come online and a new, low cost, call center located in Texas, we will be able to further reduce our operating costs in the coming years," added Marlow.



"The Company's operations showed steady improvement in 2004, as evidenced by solid underwriting, investment and cash flow performance," said Lawrence Bascom, Senior Vice President and Chief Financial Officer of 21st Century Insurance. "Standard & Poor's rating and upgraded outlook confirms the Company's positive operational progress," added Bascom.