Major Rating Factors:
Weak overall results on stability tests (2.7 on a scale of 0 to 10) including potential drain of affiliation with IAT Reinsurance Co Ltd and weak results on operational trends. Fair reserve development (3.8) as reserves have generally been sufficient to cover claims.
Other Rating Factors:
Fair profitability index (3.1) with operating losses during 2021. Return on equity has been low, averaging 2.1% over the past five years. Good liquidity (6.5) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (7.0) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels.
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:
Comm multi (20.0%), personal/comm auto (6.7%), product liab. (3.0%), fire (2.3%), other (68.0%)
Licensed in:
All states, the District of Columbia and Puerto Rico
Principal Investments:
Common stock (49.7%), investment grade bonds (35.2%), non investment grade bonds (7.6%), cash (3.9%), preferred stock (3.0%), other (0.6%)