Major Rating Factors: Poor long-term capitalization index (1.5 on a scale of 0 to 10) based on weak current risk adjusted capital (severe and moderate loss scenarios). Weak overall results on stability tests (2.2) including weak risk adjusted capital in prior years and weak results on operational trends. The largest net exposure for one risk is high at 3.2% of capital.
Other Rating Factors: Fair reserve development (3.2) as the level of reserves has at times been insufficient to cover claims. In 2017 and 2018 the two year reserve development was 24% and 56% deficient respectively. Fair profitability index (4.0) with operating losses during 2017, 2018, 2019 and 2020. Average return on equity over the last five years has been poor at -9.5%. Good liquidity (5.6) with sufficient resources (cash flows and marketable investments) to handle a spike in claims.
Stability Factors: C - Past results on our Risk-Adjusted Capital tests. R - Concerns about the financial strength of its reinsurers. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Fire (9.6%), comm multi (6.9%), med mal (3.8%), other (79.6%)
Licensed in: All states, the District of Columbia and Puerto Rico
Principal Investments: Investment grade bonds (73.1%), cash (8.1%), non investment grade bonds (3.8%), other (15.1%)