Major Rating Factors: Weak profitability index (2.8). Weak expense controls. Return on equity has been low, averaging 2.3% over the past five years.
Other Rating Factors: Vulnerable liquidity (2.9) as a spike in claims may stretch capacity. Weak overall results on stability tests (1.0) including weak financial strength of affiliated American Family Ins Group, weak results on operational trends and negative cash flow from operations for 2021. Good overall long-term capitalization (6.4) based on good current risk adjusted capital (moderate loss scenario). However, capital levels have fluctuated during prior years.
Stability Factors: D - Limited diversification of general business, policy, and/or investment risk. F - Negative cash flow. G - Fast asset or premium growth. L - Past results on our liquidity tests.
Principal Lines of Business: Comm multi (34.3%), personal/comm auto (12.4%), work comp (10.4%), farmowners (0.4%), other (42.5%)
Licensed in: All states except PR
Principal Investments: Investment grade bonds (78.1%), cash (16.7%), other (5.2%)