The ratings reflect Springfield’s sound capitalization, recently improved operating performance and adequate liquidity. Springfield’s underwriting results and capitalization have benefited significantly in recent years by the operating environment in California, the company’s largest market.
Partially offsetting these positive rating factors is the volatility in the company’s historical operating performance caused in part by significant adverse loss reserve development. Further offsetting these positive rating factors is the somewhat limited market profile of the company, exposing it to elevated risks associated with legislative and judicial changes as well as competitive pressures. Despite these concerns, the outlook reflects the expectation that capitalization will continue to remain supportive of Springfield’s operating risks.