Major Rating Factors:
Fair reserve development (4.9 on a scale of 0 to 10) as reserves have generally been sufficient to cover claims. Fair liquidity (4.6) as cash resources may not be adequate to cover a spike in claims.
Other Rating Factors:
Fair overall results on stability tests (3.9) including weak results on operational trends and negative cash flow from operations for 2022. The largest net exposure for one risk is acceptable at 2.0% of capital. Strong long-term capitalization index (8.1) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels. Weak profitability index (2.5) with operating losses during 2018 and 2022. Return on equity has been low, averaging 2.1% over the past five years.
Stability Factors:
F - Negative cash flow.
L - Past results on our liquidity tests.
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Personal/comm auto (48.6%), homeowners (29.7%), fire (2.2%), other (19.5%)
Licensed in:
All states except PR
Principal Investments:
Investment grade bonds (96.7%), cash (2.0%), preferred stock (1.4%)