Major Rating Factors: Fair profitability index (4.3 on a scale of 0 to 10) with operating losses during 2015 and the first nine months of 2020. Return on equity has been low, averaging 0.4% over the past five years. Fair overall results on stability tests (3.5).
Other Rating Factors: Good liquidity (6.9) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (7.7) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels. Ample reserve history (7.0) that can protect against increases in claims costs.
Stability Factors: R - Concerns about the financial strength of its reinsurers. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Work comp (100.0%)
Licensed in: AZ, CA, CO, ID, NV, OR, UT
Principal Investments: Investment grade bonds (77.9%), common stock (10.3%), cash (2.7%), other (9.1%)