Major Rating Factors:
Fair overall results on stability tests (4.5 on a scale of 0 to 10) including potential drain of affiliation with Progressive Group, weak results on operational trends and excessive premium growth. Fair reserve development (4.3) as reserves have generally been sufficient to cover claims.
Other Rating Factors:
Good liquidity (5.7) 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). Moreover, capital has steadily grown over the last five years. Excellent profitability (9.7) with operating gains in each of the last five years. Return on equity has been excellent over the last five years averaging 28.0%.
Stability Factors:
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Personal/comm auto (96.7%), comm multi (0.4%), other (3.0%)
Licensed in:
All states except PR
Principal Investments:
Investment grade bonds (94.4%), common stock (3.6%), non investment grade bonds (1.7%), preferred stock (0.3%)