State Farm
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The downgrade reflects the company’s balance sheet strength, which AM Best assessed as weak.
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The carrier stopped accepting new HO business in the state last May.
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Personal lines rate filings are rising, even as some inflation drivers slow.
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Increased cat losses in property offset auto improvements.
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Cooling CPI metrics and improving loss ratios indicate a positive shift for the personal auto industry, but results are not yet back to where they need to be.
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Personal auto carriers risk falling behind in the battle between loss costs and approved rate declines, while homeowners carriers’ double-digit filings might not be enough to keep up.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Carriers have been dealing with elevated storm activity this year, whilst additional purchases to match inflating values had largely been parked in 2023.
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This is the second downgrade faced by State Farm and its subsidiaries from AM Best in the last month.
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The ratings agency affirmed its financial strength rating of A++ and long-term ICR of aa+ on the mutual and its affiliates.
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Differing trends in short- and long-tail lines offset each other to create a net positive for the industry, though the releases are slowing significantly.
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Inside P&C’s news team runs you through the key highlights of the week.
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An uneven loss environment in personal lines calls for a cautious reading of reserves.
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California Insurance Commissioner Ricardo Lara was speaking about climate change's impact on insurance pricing at the Bermuda Climate Summit.
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CPI figures show loss costs are cooling, and if rate levels cannot reach adequacy we are likely to see more pausing from the industry beyond State Farm, Allstate and Nationwide.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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Other carriers reportedly pulling back from writing business in California recently include Mercury General and Safeco, while Oregon Mutual is said to have exited the California market altogether.
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Continuing rises in loss frequency and severity plus a difficult regulatory framework make the situation in California highly challenging for carriers.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The company wrote the most California homeowners multi-peril insurance, at $2.56bn, and fire lines and home multi-peril insurance, at $2.66bn, in 2022, according to AM Best data.
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High-impact rate filings in California have driven increases nationwide.
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