Major Rating Factors: Weak overall results on stability tests (2.0 on a scale of 0 to 10) including weak risk adjusted capital in prior years and excessive premium growth. The largest net exposure for one risk is high at 3.5% of capital. Strengths include potentially strong support from affiliation with Cottage Ins Holdings Inc. Poor long-term capitalization index (0.3) based on weak current risk adjusted capital (severe and moderate loss scenarios).
Other Rating Factors: Vulnerable liquidity (0.0) as a spike in claims may stretch capacity. Good overall profitability index (6.0) despite operating losses during 2017 and 2019. Return on equity has been fair, averaging 8.6% over the past five years. Ample reserve history (7.4) that can protect against increases in claims costs.
Stability Factors: C - Past results on our Risk-Adjusted Capital tests. G - Fast asset or premium growth. L - Past results on our liquidity tests. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Homeowners (16.5%), fire (12.4%), personal/comm auto (0.3%), other (70.7%)
Licensed in: All states except DC, ID, IA, ME, MA, MI, MN, MT, NE, NH, NY, ND, SD, VT, WV, WI, WY, PR
Principal Investments: Investment grade bonds (75.8%), cash (10.9%), common stock (9.8%), non investment grade bonds (2.5%), other (1.1%)