Major Rating Factors: Weak profitability index (0.4 on a scale of 0 to 10) with operating losses during 2017, 2018 and the first three months of 2021. Average return on equity over the last five years has been poor at -32.0%. Weak overall results on stability tests (1.0) including excessive premium growth and negative cash flow from operations for 2020.
Other Rating Factors: Fair reserve development (4.9) as reserves have generally been sufficient to cover claims. Good long-term capitalization index (6.1) based on fair current risk adjusted capital (moderate loss scenario), although results have slipped from the good range during the last year. Superior liquidity (9.9) with ample operational cash flow and liquid investments.
Stability Factors: F - Negative cash flow. G - Fast asset or premium growth. R - Concerns about the financial strength of its reinsurers. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Work comp (58.4%), personal/comm auto (33.8%), comm multi (5.0%), other (2.8%)
Licensed in: All states except ND, PR
Principal Investments: Investment grade bonds (54.2%), cash (7.1%), non investment grade bonds (3.1%), preferred stock (0.8%), other (34.8%)