Thirteen U.S. Property/Casualty Insurers Impaired in 2023, Ten Enter Insolvency

In 2023, AM Best reported a rise in U.S. property/casualty insurance impairments to 13 companies, with natural disasters and auto insurance losses driving insolvencies.

A recent analysis by AM Best has revealed that thirteen property and casualty insurance companies in the United States faced impairment in 2023, marking a significant jump from previous years.

Out of these, ten insurers have entered insolvency proceedings.

Overview of Impairments

This year, the number of impairments surged compared to 2022, when just six companies were affected.

AM Best’s special report provides an overview of this year’s impairments while also revisiting data from 2000 to 2022.

The report indicates a variety of causes behind these impairments.

Five of the insurers faced heavy losses tied to natural disasters.

Four of those affected were private passenger auto insurance providers.

Notably, intense storm activity in the Midwest and South took a toll on four of the companies, exacerbating their financial struggles.

Additionally, two insurers have been in runoff status for an extended period, indicating they have opted to stop writing new business while settling existing claims.

Another company, a commercial multi-peril writer in California, has grappled with adverse loss reserve development.

The last affected company, a small fire insurer from Missouri, has been unable to generate enough revenue to cover its operational costs.

Statistical Insights

The report, titled “2023 U.S. Property/Casualty Impairments Update,” highlights a staggering total of 432 impairment instances among property and casualty insurers from 2000 to 2023.

This total includes 364 cases of insolvency liquidations and 66 rehabilitations—43 have concluded while 23 are still in progress.

Furthermore, it notes 59 conservatorships, with 57 resulting in rehabilitation or liquidation.

Analyzing the data from the past two decades, the report reveals that workers’ compensation insurance providers constitute 23% of total impairments.

Personal lines insurers make up 31%, with a breakdown of 19% related to private passenger auto policies and 12% for homeowners insurance.

Commercial lines accounted for 22% of impairments, divided among various types such as other liability (14%) and commercial auto policies (8%).

The remaining impairments are spread across assorted specialty lines, adding up to another 23%.

Further Information

For those looking to delve deeper into the findings, the full report is available for purchase at AM Best’s website.

AM Best stands as a global credit rating agency, news service, and provider of analytical data, with a specific focus on the insurance industry.

Headquartered in the United States, AM Best operates in over 100 countries and has regional offices in major cities such as London, Amsterdam, Dubai, Hong Kong, Singapore, and Mexico City.

Source: News.ambest.com