The counterparty credit rating on Unitrin Inc. reflects the company's strong liquidity position, strong niche business positions through various operating companies, and strong quality of capital. Partially offsetting these strengths is the company's above-average exposure to equity risk, with 20% of assets in equity securities as of Sept. 30, 2004, and limited growth prospects in many target markets and niches. The rating is buttressed by the company's very strong liquidity position. Unitrin Inc. has several large corporate investments, including a significant investment in the common and preferred stock of Northrop Grumman Corp. Corporate investments held at the holding company provide about $14 million of annual cash dividend income, versus an annual interest expense estimated at $28 million. In addition the
