Further pullouts in key state to hit nearly 13,000 insurance policies
Further pullouts in key state to hit nearly 13,000 insurance policies | Insurance Business America
Property
Further pullouts in key state to hit nearly 13,000 insurance policies
Two companies say they have no plans to return
Property
By
Terry Gangcuangco
Tokio Marine America Insurance Company and Trans Pacific Insurance Company, both part of Tokio Marine Holdings, have no plans to return to California’s personal lines market once they leave in the second half of the year.
In an emailed statement to Bloomberg, the property insurers said: “Given the small segment of personal lines business we write and escalating costs, we cannot sustainably support personal lines coverages and do not plan to return.
“We remain committed to commercial lines in California – and across the country – and supporting our agents and customers with exceptional service through this transition.”
According to filings submitted to the California Department of Insurance, the withdrawal of the two companies will impact 12,556 policies worth $11.3 million in premiums.
The nearly 13,000 policies will add to the growing number of insurance contracts that providers are choosing not to renew in California.
As announced in March, State Farm General Insurance Company is not renewing around 30,000 homeowners’, rental dwelling, and other property insurance policies, as well as about 42,000 commercial apartment policies.
The “difficult but necessary” move is aimed at ensuring State Farm General’s sustainability in the state.
Earlier this month, Farmers Group chief executive Raul Vargas told attendees of the Global Sustainable Insurance Summit in Los Angeles that insurers need the confidence to price correctly for risk.
The assertion came in response to a question by Insurance Commissioner Ricardo Lara on how to get insurers back to California.
Farmers Group has remained in the state through constructive engagement with the CA Department of Insurance. For Vargas, the use of catastrophe modeling in rates-setting would be key – expressing support for Lara’s proposed expansion of catastrophe modeling use.
Under the proposed regulation, the allowable use will be widened to include wildfire, terrorism, and flood lines for homeowners’ and commercial insurance. Currently, using catastrophe models in the state is limited to earthquake losses and post-quake fire.
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