Texas-based American National Group is set to stop offering homeowners' insurance in the California market and eight other states due to ongoing losses. The insurer has officially notified the California Department of Insurance of its intention to stop offering homeowner insurance policies by the upcoming fall, with non-renewal notices going to policyholders as soon as August. As of December 2023, American National covered 36,475 homeowner policies in California, generating approximately $37.9 million in premium revenue.
In a formal statement, the company’s spokesperson elaborated on the reasons behind this decision: “This action is driven by significant and persistent profitability issues in the homeowners insurance market,” citing “inflationary pressures driving up costs, increasing claims frequency, and competitive market conditions” as key factors contributing to their financial struggles. The company anticipates these challenges to continue in the future.
As well as leaving America’s most populous state, American National has plans to cease offering homeowners' insurance in an additional eight states, including Arkansas, Colorado, Louisiana, Minnesota, Oklahoma, South Carolina, South Dakota, and Washington. The precise timeline for the company’s exit has not been finalized.
“Impacted clients will receive a pre-non-renewal letter with more information followed by a formal non-renewal notice following all regulatory requirements,” Scott Campbell, chief client experience and corporate comms officer at American National told broadcaster KCRA3.
And American National is not the only insurer feeling the pinch in the golden state. State Farm, Allstate, and Farmers (the three insurers cover more than 40% of California’s home insurance) have all paused new policies or set strict caps on them.
The state’s FAIR plan, its insurer of last resort is currently receiving over 1,000 applications a day – adding stress to an already very tightly wound system.
Regulators are scrambling to try to take pressure off the system. “We’re going to modernize the entire insurance market in California,” Insurance Commissioner Ricardo Lara said. “We need to de-populate the FAIR Plan. That’s part of the strategy here.”
By relaxing some regulations (but requiring insurers to cover at least 85% of homes in certain high-risk areas), Lara hopes to see competition provide some downward pressure on premiums by 2025.
California’s biggest property and casualty insurers by GWP and market share
|
Rank |
Insurer |
Written Premium (USD) |
Market Share (%) |
|---|---|---|---|
|
1 |
STATE FARM GRP |
7,067,949,481 |
8.3394 |
|
2 |
FARMERS INS GRP |
6,668,068,539 |
7.8676 |
|
3 |
BERKSHIRE HATHAWAY GRP |
5,419,648,394 |
6.3946 |
|
4 |
ALLSTATE INS GRP |
4,398,811,627 |
5.1901 |
|
5 |
LIBERTY MUT GRP |
3,614,646,145 |
4.2649 |
|
6 |
AUTO CLUB ENTERPRISES INS GRP |
3,448,202,029 |
4.0685 |
|
7 |
TRAVELERS GRP |
3,425,369,957 |
4.0416 |
|
8 |
MERCURY GEN GRP |
3,272,110,832 |
3.8607 |
|
9 |
CSAA INS GRP |
3,013,272,768 |
3.5553 |
|
10 |
CHUBB LTD GRP |
2,999,556,988 |
3.5392 |
|
11 |
PROGRESSIVE GRP |
2,525,001,751 |
2.9792 |
|
12 |
KEMPER CORP GRP |
2,420,955,610 |
2.8565 |
|
13 |
UNITED SERV AUTOMOBILE ASSN GRP |
2,320,547,773 |
2.7380 |
|
14 |
NATIONWIDE CORP GRP |
2,168,795,733 |
2.5589 |
|
15 |
HARTFORD FIRE & CAS GRP |
1,736,814,189 |
2.0493 |
|
16 |
ZURICH INS GRP |
1,605,860,978 |
1.8947 |
|
17 |
AMERICAN INTL GRP |
1,326,498,860 |
1.5651 |
|
18 |
CNA INS GRP |
1,284,303,233 |
1.5153 |
|
19 |
STATE COMPENSATION INS FUND |
1,235,450,577 |
1.4577 |
|
20 |
TOKIO MARINE HOLDINGS INC GRP |
1,208,740,278 |
1.4262 |
|
21 |
FAIRFAX FIN GRP |
1,168,976,762 |
1.3793 |
|
22 |
AXA INS GRP |
1,039,792,333 |
1.2268 |
|
23 |
AMTRUST FINANCIAL SERV GRP |
988,249,016 |
1.1660 |
|
24 |
CALIFORNIA EARTHQUAKE AUTHORITY |
901,285,346 |
1.0634 |
|
25 |
AMERICAN FAMILY INS GRP |
812,336,909 |
0.9585 |
(California Department of Insurance, 2021)
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