OLDWICK, N.J.–(BUSINESS WIRE)–Seventeen insurance company impairments were identified in the U.S. property/casualty industry in 2021, with seven impacted by catastrophe losses resulting from hurricanes, primarily in Louisiana and Florida, according to a AM Best report.
The Best’s Special Report, titled, “2021 US Property/Casualty Impairments Update,” states that of the 17 insurance companies that became impaired, 16 were placed into liquidation. In the 2000-2021 study period, 413 property/casualty insurers became impaired. These impairments consisted of 348 insolvent liquidations and 64 rehabilitations, 22 of which were closed during the period, and 42 remained open as of this report. In addition, there were 57 conservatorships, 56 of which led directly to either rehabilitation or liquidation.
In addition to the five Louisiana-domiciled companies and two Florida-domiciled ones, impairments identified in 2021 included four commercial auto insurers and a pair of Vermont-domiciled risk retention groups. During the study period, catastrophe losses were the leading cause, with 28 impairments, while fraud or alleged fraud was the next-leading primary cause, at 25.
Of the 413 property/casualty companies that became impaired during 2000-2021, 171 (41%) were rated by AM Best at some point. In the most recent 10-year period, the number of companies holding an AM Best rating at any point during the three-year period prior to impairment has declined. From 2012 through 2021, 141 U.S. property/casualty companies became impaired, of which 41, or 29%, were rated by AM Best at some point during the period, compared with 41% over the longer 2000-2021 period.
To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=330281.
A report identifying 2022 property/casualty impairments is expected later this year.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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