Major Rating Factors: History of adequate reserve strength (6.0 on a scale of 0 to 10) as reserves have been consistently at an acceptable level. Good overall profitability index (6.1) despite operating losses during the first nine months of 2020. Return on equity has been fair, averaging 8.1% over the past five years.
Other Rating Factors: Good liquidity (6.0) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Fair overall results on stability tests (4.6). Strong long-term capitalization index (8.6) 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: Homeowners (73.2%), personal/comm auto (10.4%), comm multi (5.9%), work comp (1.3%), farmowners (1.2%), other (8.0%)
Licensed in: All states except PR
Principal Investments: Investment grade bonds (78.5%), common stock (20.1%), other (1.4%)