Major Rating Factors:
Weak overall results on stability tests (2.6 on a scale of 0 to 10) including weak risk adjusted capital in prior years and weak results on operational trends. Strengths include potentially strong support from affiliation with Cottage Ins Holdings Inc. The largest net exposure for one risk is acceptable at 2.2% of capital. Poor long-term capitalization index (0.8) based on weak current risk adjusted capital.
Other Rating Factors:
Vulnerable liquidity (0.6) as a spike in claims may stretch capacity. History of adequate reserve strength (6.0) as reserves have been consistently at an acceptable level. Good overall profitability index (5.5) despite operating losses during 2019. Return on equity has been good over the last five years, averaging 11.3%.
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:
Work comp (11.6%), homeowners (11.0%), fire (8.7%), personal/comm auto (2.7%), other (66.0%)
Licensed in:
All states except DC, ID, ME, MA, MN, MT, NE, NH, NY, ND, VT, WV, WI, WY, PR
Principal Investments:
Investment grade bonds (66.9%), cash (8.3%), common stock (4.5%), non investment grade bonds (1.4%), other (19.0%)