Major Rating Factors:
Fair reserve development (4.0 on a scale of 0 to 10) as reserves have generally been sufficient to cover claims. Fair overall results on stability tests (3.2) including weak results on operational trends. The largest net exposure for one risk is high at 4.8% of capital.
Other Rating Factors:
Good overall profitability index (6.6). Fair expense controls. Return on equity has been good over the last five years, averaging 12.8%. Good liquidity (6.6) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Strong long-term capitalization index (7.3) based on excellent current risk adjusted capital (severe and moderate loss scenarios), despite some fluctuation in capital levels.
Stability Factors:
R - Concerns about the financial strength of its reinsurers.
T - Significant trends in critical asset, liability, income or expense items.
Principal Lines of Business:
Fin guar/surety (10.5%), comm multi (6.4%), personal/comm auto (2.1%), other (81.0%)
Licensed in:
All states except PR
Principal Investments:
Investment grade bonds (76.6%), non investment grade bonds (7.9%), cash (1.4%), common stock (0.2%), preferred stock (0.2%), other (13.7%)