Major Rating Factors: Fair overall results on stability tests (3.9 on a scale of 0 to 10). Strengths include potentially strong support from affiliation with State Farm Group. Weak profitability index (1.6) with operating losses during 2017, 2018 and the first nine months of 2020. Average return on equity over the last five years has been poor at -10.0%.
Other Rating Factors: History of adequate reserve strength (6.1) as reserves have been consistently at an acceptable level. Good liquidity (5.4) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (7.1) based on good current risk adjusted capital (severe and moderate loss scenarios), although results have slipped from the excellent range during the last year.
Stability Factors: T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Homeowners (72.3%), comm multi (15.2%), fire (0.8%), farmowners (0.4%), other (11.3%)
Licensed in: All states except CT, MA, RI, PR
Principal Investments: Investment grade bonds (97.8%), non investment grade bonds (0.1%), other (2.0%)