CHICAGO, Nov. 25 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR)
lowered the debt and preferred stock ratings of AmerUs Life Holdings, Inc.
(ALHI), and the claims paying ability ratings of its subsidiaries, AmerUs Life
Insurance Company (AmerUs Life) and Delta Life and Annuity Company (Delta).
The claims paying ability rating of American Investors Life Insurance Company
(AIL) was reaffirmed.  The ratings of Delta and AIL rely on the support of
their affiliate, AmerUs Life. The outlook for all ratings is revised from
negative to stable.
    The rating action is based on lower-than-expected earnings due to a strong
competitive environment, a decline in the market franchise of Delta since its
acquisition and an increased concentration of interest-sensitive commodity-
like products.  The very high ratings continue to reflect ALHI's diverse
product lines and distribution channels, a stable book of core life insurance
business, good financial flexibility with moderate financial leverage, an
adequate, although significantly reduced, surplus position at the insurance
subsidiaries and good asset quality.
    ALHI's earnings growth have been driven by acquisition.  Overall, earnings
have remained below expectations due to competitive pressures, increased
information technology-related expenses and an investment loss.  Expected
return on assets and return on equity (adjusted for a nonrecurring after-tax
investment loss of $6.4 million) for 1998 at approximately 0.8 percent and
6.5 percent, respectively, are low, given the level of leverage.  Going
forward, earnings growth is expected to be limited by competitive pressures
and information technology expenses.
    ALHI's distribution channels have been significantly expanded over the
last two years but the annuity production of most channels has been below
expectations.  On the other hand, management's recent focus on distribution
development has produced good growth of life sales.  Life insurance sales at
AmerUs Life grew 16 percent during the first nine months of 1998 and similar
growth is expected to continue in 1999.
    Sales growth of variable products also improved somewhat in 1998 but
remains below expectations.  Sales at Delta have experienced a significant
decline since its acquisition in late-1997 due to the low interest-rate
environment and a disruption of its distribution force.  The introduction of
new products in 1999 should attract new producers and begin to grow sales.
Distribution at AIL, on the other hand, has been significantly strengthened
and its productivity improved to produce continued sales growth of its fixed-
annuity lines.
    ALHI's financial flexibility remains good with debt at 11 percent, trust
preferred securities at 18 percent and equity at 71 percent of total capital
on September 30, 1998. Financial leverage is expected to rise somewhat in
conjunction with a proposed buyback of the company's common stock.  DCR
expects debt and trust preferred securities, excluding the equity-like
mandatorily convertible securities, to remain under 25 percent of total
capital.  Interest and preferred dividend coverage at 4.5 times is adequate.
Capital position at the operating subsidiaries is considered adequate, with a
consolidated risk-based capital ratio of approximately 240 percent, but is
somewhat below the norm for its rating category.
    AmerUs Life Holdings, Inc. is an indirect subsidiary of American Mutual
Holding Company, the first insurance company to reorganize as an insurance
mutual holding company (MHC), and the only MHC with publicly traded common
stock.  On September 30, 1998, the company had $10.3 billion of assets and
$888 million of stockholders' equity.  The company is 43 percent publicly
owned.

    Entity                          Type          Rating          Prior
    AmerUs Life Ins. Co.            CPA             A+              AA-
    Delta Life and Annuity Co.      CPA             A+              AA-
    American Investors Life Ins Co. CPA             A+              A+
    AmerUs Life Holdings, Inc.      Sr. Debt        BBB+            A-
    AmerUs Life Holdings, Inc.      ACES            BBB             BBB+
    AmerUs Life Holdings, Inc.      QUIPs           BBB             BBB+

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