Major Rating Factors: Fair overall results on stability tests (3.9 on a scale of 0 to 10) including potential drain of affiliation with Liberty Mutual Group. Fair reserve development (4.8) as reserves have generally been sufficient to cover claims.
Other Rating Factors: Good overall profitability index (6.3) with small operating losses during 2017. Return on equity has been low, averaging 4.0% 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 (8.2) 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. 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 (14.4%), fin guar/surety (13.3%), personal/comm auto (7.2%), work comp (4.6%), farmowners (1.1%), product liab. (0.3%), fire (0.2%), other (58.8%)
Licensed in: All states except PR
Principal Investments: Investment grade bonds (66.7%), non investment grade bonds (7.0%), common stock (3.6%), other (22.7%)