Major Rating Factors:
A history of deficient reserves (0.4 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 69% and 51% deficeint. Weak profitability index (2.6) with operating losses during 2019, 2021 and 2022. Average return on equity over the last five years has been poor at -6.7%.
Other Rating Factors:
Weak overall results on stability tests (1.1) including weak results on operational trends and negative cash flow from operations for 2022. The largest net exposure for one risk is conservative at 1.0% of capital. Fair long-term capitalization index (4.0) based on fair current risk adjusted capital (severe loss scenario). Good liquidity (5.7) with sufficient resources (cash flows and marketable investments) to handle a spike in claims.
Stability Factors:
F - Negative cash flow.
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Comm multi (35.3%), personal/comm auto (15.8%), homeowners (9.0%), work comp (7.1%), product liab. (6.8%), fire (2.9%), fin guar/surety (0.1%), other (23.0%)
Licensed in:
All states except NY, PR
Principal Investments:
Investment grade bonds (77.6%), common stock (0.6%), other (21.8%)