Major Rating Factors: Fair overall results on stability tests (3.9 on a scale of 0 to 10) including weak results on operational trends. Strengths include potentially strong support from affiliation with State Farm Group. The largest net exposure for one risk is conservative at 1.6% of capital. Weak profitability index (1.5) with operating losses during 2017, 2018 and 2020. Average return on equity over the last five years has been poor at -13.2%.
Other Rating Factors: Good liquidity (6.0) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (7.2) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels. Ample reserve history (7.0) that can protect against increases in claims costs.
Stability Factors: T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Homeowners (72.6%), comm multi (14.3%), fire (1.4%), farmowners (0.5%), other (11.2%)
Licensed in: All states except CT, MA, RI, PR
Principal Investments: Investment grade bonds (92.7%), other (7.3%)