Major Rating Factors: Fair overall results on stability tests (3.4 on a scale of 0 to 10) including potential drain of affiliation with Automobile Club of Michigan Group. History of adequate reserve strength (6.9) as reserves have been consistently at an acceptable level.
Other Rating Factors: Good overall profitability index (5.1) despite operating losses during the first six months of 2022. Return on equity has been low, averaging 3.3% over the past five years. Good liquidity (6.3) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (9.8) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels.
Stability Factors: T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Personal/comm auto (77.5%), homeowners (21.7%), other (0.8%)
Licensed in: IN, IA, MI, NE, ND, PA, WI
Principal Investments: Investment grade bonds (99.7%), non investment grade bonds (0.2%), other (0.2%)