Major Rating Factors:
Poor long-term capitalization index (0.8 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 (1.3) including weak risk adjusted capital in prior years and weak results on operational trends. The largest net exposure for one risk is excessive at 6.0% of capital.
Other Rating Factors:
Fair reserve development (3.7) as the level of reserves has at times been insufficient to cover claims. In 2022 and 2020 the one year reserve development was 17% and 23% deficient respectively. Fair profitability index (4.3) with operating losses during 2018, 2020 and 2022. Average return on equity over the last five years has been poor at -1.2%. Excellent liquidity (7.0) with ample operational cash flow and liquid investments.
Stability Factors:
C - Past results on our Risk-Adjusted Capital tests.
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Personal/comm auto (12.5%), product liab. (3.6%), fire (2.4%), fin guar/surety (0.5%), other (81.0%)
Licensed in:
All states, the District of Columbia and Puerto Rico
Principal Investments:
Investment grade bonds (81.5%), cash (6.9%), non investment grade bonds (4.3%), common stock (1.9%), other (5.4%)