Major Rating Factors:
A history of deficient reserves (0.8 on a scale of 0 to 10) that places pressure on both capital and profits. In the last five years, reserves (two year development) fluctuated between 63% and 38% deficeint. Weak profitability index (2.1) with operating losses during 2019 and 2022. Average return on equity over the last five years has been poor at -0.2%.
Other Rating Factors:
Vulnerable liquidity (1.7) as a spike in claims may stretch capacity. Weak overall results on stability tests (1.2) including weak results on operational trends and negative cash flow from operations for 2022. The largest net exposure for one risk is excessive at 9.3% of capital. Good overall long-term capitalization (6.0) based on good current risk adjusted capital (moderate loss scenario). However, capital levels have fluctuated during prior years.
Stability Factors:
F - Negative cash flow.
L - Past results on our liquidity tests.
R - Concerns about the financial strength of its reinsurers.
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Fire (21.0%), med mal (7.1%), personal/comm auto (6.1%), product liab. (0.3%), other (65.6%)
Licensed in:
All states except PR
Principal Investments:
Investment grade bonds (75.3%), non investment grade bonds (18.3%), cash (2.7%), preferred stock (0.3%), common stock (0.1%), other (3.3%)