Major Rating Factors: History of adequate reserve strength (5.8 on a scale of 0 to 10) as reserves have been consistently at an acceptable level. Good liquidity (6.1) with sufficient resources (cash flows and marketable investments) to handle a spike in claims.
Other Rating Factors: Good overall results on stability tests (5.1) despite weak results on operational trends. Fair profitability index (4.7) with operating losses during 2020. Return on equity has been low, averaging 3.7% over the past five years. Strong long-term capitalization index (8.6) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels.
Stability Factors: T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Homeowners (75.5%), personal/comm auto (8.4%), comm multi (5.9%), farmowners (1.2%), work comp (1.1%), other (8.1%)
Licensed in: All states except PR
Principal Investments: Investment grade bonds (69.4%), common stock (25.5%), other (5.1%)