Major Rating Factors: History of adequate reserve strength (6.6 on a scale of 0 to 10) as reserves have been consistently at an acceptable level. Good overall profitability index (5.6) despite operating losses during 2017 and the first six months of 2021. Return on equity has been good over the last five years, averaging 10.3%.
Other Rating Factors: Good liquidity (6.5) with sufficient resources (cash flows and marketable investments) to handle a spike in claims. Fair overall results on stability tests (4.1). Strong long-term capitalization index (9.9) 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 (92.7%), comm multi (5.2%), farmowners (1.9%), other (0.2%)
Licensed in: TX
Principal Investments: Investment grade bonds (95.1%), other (4.9%)