Major Rating Factors:
Fair overall results on stability tests (3.5 on a scale of 0 to 10) including potential drain of affiliation with Sentry Ins Group and weak results on operational trends. Good overall profitability index (6.9). Fair expense controls. Return on equity has been low, averaging 4.1% over the past five years.
Other Rating Factors:
Good liquidity (6.7) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (8.9) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels. Ample reserve history (8.5) that helps to protect the company against sharp claims increases.
Stability Factors:
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Personal/comm auto (100.0%)
Licensed in:
All states except MI, PR
Principal Investments:
Investment grade bonds (82.3%), common stock (13.6%), real estate (0.8%), non investment grade bonds (0.2%), other (3.1%)