State Farm
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Mutuals struggle to react and adapt to a worsening loss environment.
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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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The new 2022 stat data shows personal lines premium has grown year-over-year, but the loss ratios have been hit hard by catastrophes and loss cost inflation.
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Rate action for personal auto insurers has been increasing in 2023 to balance rising loss cost trends
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Personal lines insurers see a vastly different outlook in 2022 than 2021 and their reserve development reflects this.
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Inside P&C’s news team runs you through the key highlights of the week.
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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 personal lines giant is closely watched as a bellwether for the size of the overall homeowners loss.
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Hurricane Ian’s total effect is still unknown, but lessons from Hurricane Irma give insight into potential outcomes.
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If current forecasts prove accurate, this will be a pivotal moment for the already off-balance Florida cohort and could result in a new market landscape.
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Claims analysis shows slow reactions to negative trends can affect several quarters, but carriers who emerge strong will be able to pursue growth faster than the competitors who are always playing catchup on loss cost trends.
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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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Market sources are suggesting inflation could require a wider group of US cedants to buy $10bn-$20bn of additional cat coverage for 2023.
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All claims and counterclaims in the case were dismissed with prejudice, barring the parties from bringing the dispute to another US court.
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Excessive litigation costs and continued losses threaten the Sunshine state’s market.
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Forecasters have again predicted an active season for storm activity, with the Florida market particularly vulnerable to high cat activity.
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Data from Apple and Google show that Omicron has slowed the return to driving in some of the largest states by premiums.
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Commercial lines loss ratios may move slightly higher, while personal auto carriers see the light at the end of the loss-cost tunnel.
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Inside P&C's Research team looks at the prospects of Florida's wave of new arrivals.
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A complex web of factors are creating uncertainty around the likely insured loss, but much early discussion centers on a $20bn-$25bn range.
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With predicted $20bn in losses, KBW doesn’t see meaningful change to the rate increase trajectory.
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The newcomers are finding it more difficult to disrupt the sector than they had expected.
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Businesses in Old Dominion claimed the insurer wrongfully denied coverage after they had to close their operations due to the pandemic.
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State Farm has joined forces with auto insurer Hagerty to roll out new coverage for classic vehicles beginning in 2022.
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Travelers, Liberty Mutual, State Farm and Allstate announced suspension of donations in January, but have now re-started financial backing for elected officials.