Major Rating Factors: Fair reserve development (4.5 on a scale of 0 to 10) as reserves have generally been sufficient to cover claims. Fair overall results on stability tests (3.9) including fair financial strength of affiliated Liberty Mutual Group.
Other Rating Factors: Good overall profitability index (6.2) despite operating losses during 2017 and the first six months of 2022. Return on equity has been fair, averaging 6.8% over the past five years. Good liquidity (6.4) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (7.8) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels.
Stability Factors: A - Financial problems or weaknesses of a parent or affiliate company. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Personal/comm auto (41.3%), homeowners (20.5%), work comp (8.7%), fire (7.4%), product liab. (1.5%), comm multi (1.4%), fin guar/surety (0.2%), other (19.1%)
Licensed in: All states, the District of Columbia and Puerto Rico
Principal Investments: Investment grade bonds (68.2%), non investment grade bonds (6.7%), common stock (5.2%), other (19.9%)