Major Rating Factors: Fair overall results on stability tests (4.0 on a scale of 0 to 10) including potential drain of affiliation with CNA Financial Corp. History of adequate reserve strength (6.4) as reserves have been consistently at an acceptable level.
Other Rating Factors: Good overall profitability index (5.7). Fair expense controls. Return on equity has been fair, averaging 9.6% over the past five years. 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. Excellent liquidity (7.0) with ample operational cash flow and liquid investments.
Stability Factors: A - Financial problems or weaknesses of a parent or affiliate company. R - Concerns about the financial strength of its reinsurers. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Acc & health (6.2%), comm multi (5.6%), fire (1.9%), personal/comm auto (1.8%), work comp (1.7%), fin guar/surety (1.1%), med mal (0.9%), product liab. (0.7%), other (80.3%)
Licensed in: All states, the District of Columbia and Puerto Rico
Principal Investments: Investment grade bonds (74.2%), common stock (11.5%), non investment grade bonds (5.5%), preferred stock (1.8%), cash (0.5%), other (6.4%)