Major Rating Factors: Poor long-term capitalization index (0.5 on a scale of 0 to 10) based on weak current risk adjusted capital (severe and moderate loss scenarios). A history of deficient reserves (0.9) that places pressure on both capital and profits. In the last five years, reserves (two year development) fluctuated between 67% and 34% deficeint.
Other Rating Factors: Weak profitability index (0.2) with operating losses during each of the last five years and the first six months of 2022. Average return on equity over the last five years has been poor at -49.8%. Fair overall results on stability tests (3.3) including weak risk adjusted capital in prior years and negative cash flow from operations for 2021. The largest net exposure for one risk is excessive at 20.8% of capital. Superior liquidity (10.0) with ample operational cash flow and liquid investments.
Stability Factors: C - Past results on our Risk-Adjusted Capital tests. D - Limited diversification of general business, policy, and/or investment risk. F - Negative cash flow. G - Fast asset or premium growth.
Principal Lines of Business: Work comp (100.0%)
Licensed in: All states except PR
Principal Investments: Investment grade bonds (76.8%), common stock (4.6%), non investment grade bonds (1.4%), cash (1.3%), preferred stock (0.1%), other (15.7%)