Major Rating Factors: Poor long-term capitalization index (2.5 on a scale of 0 to 10) based on weak current risk adjusted capital (moderate loss scenario). A history of deficient reserves (0.8) that places pressure on both capital and profits. In the last five years, reserves (two year development) fluctuated between 60% and 49% deficeint.
Other Rating Factors: Weak overall results on stability tests (1.1) including weak results on operational trends and weak risk adjusted capital in prior years. The largest net exposure for one risk is conservative at 1.0% of capital. Good overall profitability index (5.9). Good expense controls. Return on equity has been good over the last five years, averaging 11.7%. Good liquidity (6.7) with sufficient resources (cash flows and marketable investments) to handle a spike in claims.
Stability Factors: 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 (89.5%), work comp (10.5%)
Licensed in: NJ, NY
Principal Investments: Investment grade bonds (87.6%), cash (5.3%), common stock (1.9%), non investment grade bonds (0.5%), preferred stock (0.2%), other (4.5%)