Major Rating Factors: Weak profitability index (2.5 on a scale of 0 to 10). Fair expense controls. Return on equity has been fair, averaging 14.9% over the past five years. Weak overall results on stability tests (2.7) including weak financial strength of affiliated American Family Ins Group and negative cash flow from operations for 2021.
Other Rating Factors: 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 (7.4) with ample operational cash flow and liquid investments.
Stability Factors: F - Negative cash flow. R - Concerns about the financial strength of its reinsurers. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Personal/comm auto (100.0%)
Licensed in: All states except AK, CA, DC, DE, HI, ID, ME, MI, MN, MT, NM, NY, PR
Principal Investments: Cash (34.6%), common stock (33.6%), investment grade bonds (31.5%), other (0.3%)