california

California is moving to avoid a developing insurance crisis in the state that has seen major companies pull-back on underwriting property insurance there, or exit the state entirely, with plans announced to enable insurers to better cover their loss costs and expenses within their pricing.

Issues in California surrounding property insurance availability appear to be escalating, with two more carriers reported to have pulled-back from writings in the State, while at the same time the legislative appears to have ignored the issues that are making writing wildfire-exposed property more challenging.

Farmers Insurance has become the latest major US insurance carrier to announce it is easing-back somewhat from writing property business in California, saying it will cap the number of new policies written each month now.

News emerged yesterday confirming rumours we’d heard that Nationwide is the latest major US insurance carrier to take actions in the face of challenging market conditions and escalating loss severity or frequency trends. But we’ve now learned more, including that the carrier will re-underwrite some of its personal lines book to further improve the portfolio […]

Nationwide Mutual Insurance is the latest major US carrier to announce that it is pulling-back, due to catastrophic weather losses and inflation among other reasons, planning to cease writing certain new business as it looks to get a handle on its exposure and claims frequency.

On the heels of the news that State Farm is exiting writing property insurance in California, it’s now been reported that AIG and Farmers are also shying away from the most catastrophe exposed areas.

Regular catastrophe bond sponsor State Farm is exiting the California property insurance market, ceasing to write business and personal P&C property as it cites exposure growth, rising catastrophe risks and reinsurance market challenges as reasons for the move.

U.S. coastal states such as Florida, California, and Louisiana are experiencing a growing property insurance crisis that is being driven by man-made events, highlighting the need for reinsurance capital to absorb more of the risk as carriers navigate a testing environment.

For now a third year in a row, the California Wildfire Fund is going without reinsurance or any form of risk transfer in 2022, as the market pricing on offer still does not meet the Fund’s goal of extending its durability.

For the second year running the California Wildfire Fund has shied away from buying reinsurance or any form of risk transfer, saying that current market pricing means it isn’t economically worthwhile to extend the Fund’s durability.