Major Rating Factors:
Weak profitability index (1.9 on a scale of 0 to 10) with operating losses during 2018 and 2022. Average return on equity over the last five years has been poor at -0.1%. Weak overall results on stability tests (0.7) including excessive premium growth and weak results on operational trends. The largest net exposure for one risk is excessive at 23.1% of capital.
Other Rating Factors:
History of adequate reserve strength (6.9) as reserves have been consistently at an acceptable level. Strong long-term capitalization index (10.0) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels. Excellent liquidity (7.0) with ample operational cash flow and liquid investments.
Stability Factors:
D - Limited diversification of general business, policy, and/or investment risk.
G - Fast asset or premium growth.
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Fin guar/surety (100.0%)
Licensed in:
All states except AK, FL, MS, OH, TN, PR
Principal Investments:
Non investment grade bonds (37.9%), investment grade bonds (32.7%), common stock (2.5%), cash (1.9%), other (25.0%)