Why are insurance companies going out of business?

Whether an insurance company was bought by a competitor, mismanaged its budget, or faced an unprecedented number of claims that left it bankrupt , going under is always a possibility for an insurer.

Are life insurance companies in trouble?

Many life insurance companies are using captive insurance to alter their books and look better. This could lead to another taxpayer bailout and insurance companies being taken over. This would put benefits in policies at risk for some policyholders.

Which states are insurance companies leaving?

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 .

Is Florida becoming uninsurable?

California, Florida and other wildfire states are rapidly becoming uninsurable | Fortune.

What insurance companies are struggling?

For example, State Farm and Allstate have paused all new policies while Farmers is capping the number of new policies it will write each month, according to the Department of Insurance. Those three companies alone handle more than 40% of the business in California's insurance market.

Why is the insurance industry struggling?

Declining profitability, increased catastrophe losses, rising loss ratios, increased claims costs, rising reinsurance prices and tightening capacity, lower disposable incomes, and a growing loss of talent from an acceleration of retirements, are all converging on insurers, creating a massive rationale for change.

Who is the most trustworthy life insurance company?

Jump to: MassMutual: Best overall. Guardian: Best for applicants with a history of HIV. Northwestern Mutual: Best for consumer experience. New York Life: Best for high coverage amounts. Pacific Life: Best range of permanent life insurance. State Farm: Best for customer satisfaction. AARP: Best for older applicants. 4 days ago

Are people leaving the insurance industry?

The Current Turnover Rate Historically, turnover rates in the insurance industry have increased from 8-9% to 12-15% recently, indicating that retaining employees is becoming more difficult (Deloitte United States).

Why is State Farm dropping customers?

State Farm said it is dropping policies across California for financial reasons and is ending coverage in areas with wildfire hazards, among other factors. A company spokesman declined to explain further how it decided which homes to drop.

Why are insurers pulling out of high risk areas?

“They know the risk is just too high to be actuarially sound for their business ,” he said. In its announcement, State Farm said too many buildings are being destroyed by climate catastrophes, inflation is making it too expensive to rebuild, and it can't protect its investments any longer.

Why are insurance companies laying off employees?

Major Layoffs Industry-Wide From big brands to insuretechs like Hippo that laid off roughly 20% of its employees, the cuts are undeniable. CEOs cite several drivers behind their decisions, from restructuring to improving efficiency to automation to re-evaluating product offerings .

List of bankruptcies of insurance companies in USA (2024)

The word bankruptcy causes fear worldwide except for the United States where it is not perceived as a failure but rather as a setback. Debts are written-off and a second chance is granted to the company to start anew.

Deeply rooted in American business, bankruptcy is an old practice that dates back to 1800. The United States have, therefore, seen numerous groups and jewels of their economy such as AIG, General Motors or Lehman Brothers collapse in the heat of financial scandals.

Several dozens of insurance companies, including big names in the business, have gone bankrupt in the United States in the course of the recent 30 years.

Bankruptcy of AIG case

AIG was seriously affected by the 2008 financial crisis. Under the pressure of the authorities that questioned some of the group’s practices, the group’s board of directors was pushed to part ways with its historic president Maurice Greenberg on duty for 35 years.

AIG was bailed out by American Federal Reserve (FED) which had to intervene on various occasions to inject the total amount of 205 billion USD. A drastic restructuring plan was then imposed on the group which was compelled to cede a large number of non-strategic assets including subsidiaries Alico in the United States and AIA in Asia.

Bankruptcy of Conseco

Conseco, an insurance company set up in 1979, was estimated at 61.4 billion USD upon its bankruptcy in 2002.

Bankruptcy of Executive Life Insurance Company

Executive Life Insurance Company is regarded to be the biggest bankruptcy of an insurance company in the United States in the course of recent years.

Based in California, the life company had to file for bankruptcy in 1991 following disastrous investments in junk bonds.

List of major bankruptcies of insurance companies in USA

Wind-up date	Date ofcreation	Company	Class of business	Headquarters
28/09/2022	1983	FedNat Insurance Company	Property damage	Florida
08/08/2022	-	Weston Property & Casualty Ins. Co.	Property damage	Florida
16/06/2022	2005	Southern Fidelity Insurance Co.	Property damage	Florida
29/04/2022	1983	Lighthouse Property Insurance Corp.	Property damage	Florida
14/03/2022	2008	Avatar Property & Casualty Insurance Company	Property damage	Florida
25/02/2022	2004	St. Johns Insurance Company	Property damage	Florida
Mach 2021	-	Bedivere Insurance Company	Workmen'’'s compensation, motor, non-life	Pennsylvania
September 2019	-	Senior American Insurance Co.	Non-life	Pennsylvania
January 2018	2002	Healthcare Providers Ins. Exchange	Medical professional third-party liability	Pennsylvania
March 2017	1954	Penn Treaty Network America Ins. Co. & its subsidiaries	Life	Pennsylvania
December 2016	1964	American Medical and Life Ins. Co.	Health, life and accident	New York
February 2015	2012	CoOportunity Health	Life and health	Iowa
January 2015	2008	SeeChange Health Ins. Co.	Health	California
August 2013	-	Executive Life Ins. Co. of New York	Life	New York
May 2013	1912	Lumbermens Mutual Casualty Co.	Health	Illinois
April 2013	2006	Universal Health Care Insurance Co.	Accident and health	Florida
July 2012	1934	Standard Life Ins. Co. of Indiana	Life	Indiana
January 2011	1925	Golden State Mutual Life Insurance Company	Life, accident and health	California
November 2010	1964	National States Ins. Co.	Accident and health	Missouri
May 2010	1923	Booker T. Washington Ins. Co.	Life, accident and health	Alabama
June 2006	1996	Southern Family Ins. Co.	Non-life	Florida
July 2003	-	Legion Insurance Company	Non-life, health	Philadelphia
February 2002	-	PHICO Insurance Company	Health, occupational accidents	Harrisburg
2002	1979	Conseco	Insurance and finance	Indiana
October 2001	1817	Reliance Insurance Company	Life and non-life	Philadelphia
July 2003	1978	Fremont Indemnity Ins. Co.	Health, workmen's compensation	Los Angeles, California
September 2000	1914	California Compensation Ins. Co.	Non-life	San Francisco
February 1987	1985	Mission Insurance Company	Non-life	San Francisco
March 1989	-	American Mutual Liability Ins. Co.	Non-life	Framingham
August 1986	-	Midland Insurance Company	Non-life	New York
December1985	-	Transit Casualty Insurance Company	Non-life	Jefferson City
April 1991	-	Executive Life Insurance Company	Life	California

Source: National Organization of Life and Health Insurance Guaranty Association

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List of bankruptcies of insurance companies in USA (2024)

Bankruptcy of AIG case

Bankruptcy of Conseco

Bankruptcy of Executive Life Insurance Company

List of major bankruptcies of insurance companies in USA

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