Major Rating Factors: A history of deficient reserves (2.4 on a scale of 0 to 10). Underreserving can have an adverse impact on capital and profits. Deficiencies in the two year reserve development occurred in three of the previous five years and ranged between 22% and 66%. Weak profitability index (2.1) with operating losses during the first six months of 2022. Return on equity has been low, averaging 2.6% over the past five years.
Other Rating Factors: Vulnerable liquidity (0.9) as a spike in claims may stretch capacity. Weak overall results on stability tests (1.7). The largest net exposure for one risk is excessive at 6.6% of capital. Fair long-term capitalization index (4.0) based on fair current risk adjusted capital (severe and moderate loss scenarios), although results have slipped from the good range over the last two years.
Stability Factors: L - Past results on our liquidity tests. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Personal/comm auto (100.0%)
Licensed in: AZ, AR, GA, IL, IN, IA, KY, MS, NV, OH, OK, OR, RI, SC, TX, UT
Principal Investments: Investment grade bonds (85.7%), common stock (4.7%), preferred stock (2.5%), real estate (2.3%), other (4.8%)