Major Rating Factors: Fair profitability index (3.3 on a scale of 0 to 10) with operating losses during 2017, 2018, 2019 and 2021. Return on equity has been low, averaging 0.8% over the past five years. Weak overall results on stability tests (2.6) including potential drain of affiliation with AXIS Specialty Ltd. The largest net exposure for one risk is acceptable at 2.9% of capital.
Other Rating Factors: History of adequate reserve strength (6.0) as reserves have been consistently at an acceptable level. Good liquidity (6.5) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (7.5) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels.
Stability Factors: G - Fast asset or premium growth. R - Concerns about the financial strength of its reinsurers. T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business: Fire (9.8%), product liab. (1.1%), other (89.1%)
Licensed in: All states, the District of Columbia and Puerto Rico
Principal Investments: Investment grade bonds (80.7%), other (19.3%)