Major Rating Factors:
Good liquidity (6.3 on a scale of 0 to 10) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Fair overall results on stability tests (4.9) including potential drain of affiliation with Travelers Companies Inc and weak results on operational trends.
Other Rating Factors:
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. Ample reserve history (7.8) that can protect against increases in claims costs. Excellent profitability (7.8) with operating gains in each of the last five years. Return on equity has been good over the last five years, averaging 12.1%.
Stability Factors:
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Comm multi (50.2%), fire (11.0%), product liab. (6.1%), personal/comm auto (5.7%), fin guar/surety (0.7%), other (26.4%)
Licensed in:
All states except PR
Principal Investments:
Investment grade bonds (72.5%), common stock (10.5%), real estate (4.3%), non investment grade bonds (3.6%), cash (0.2%), other (8.9%)