Tag: AIG

Why Insurers Are Fleeing California

Mary Pat Campbell

Link: https://www.wsj.com/articles/state-farm-homeowners-insurance-california-2a934a22?st=0vc5cbqwbedf0b2&reflink=desktopwebshare_permalink

Excerpt:

State Farm General Insurance Co. last week became the latest insurer to retreat from California’s homeowners market. The culprit isn’t climate change, as the media claims in parroting Sacramento talking points. The cause is the Golden State’s hostile insurance environment.

The nation’s top property and casualty insurer on Friday said it won’t accept new applications for homeowners insurance, citing “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.”

In other words, State Farm can’t accurately price risk and increase its rates to cover ballooning liabilities. Other property and casualty insurers, including AIG and Chubb, have also been shrinking their California footprint after years of catastrophic wildfires, which are becoming more common owing to drought and decades of poor forest management.

Author(s): Editorial Board

Publication Date: 30 May 2023

Publication Site: Wall Street Journal

“What If I Can’t Insure My Home At All?”

Mary Pat Campbell

Link:https://www.dailyposter.com/what-if-i-cant-insure-my-home-at-all/

Excerpt:

Insurance giants Chubb, Liberty Mutual, and AIG are three of the biggest insurers of fossil fuel infrastructure around the world. But the companies have just announced plans to scale back their homeowner coverage in California, where they insist future climate-related losses will likely prevent them from turning a profit.

The coverage withdrawals may soon ignite a big money battle in the state’s legislature, pitting insurance giants against lawmakers trying to preserve coverage for their constituents. Meanwhile, climate campaigners are decrying what they say is a fundamental hypocrisy.

…..

Last year, Chubb’s chairman and CEO Evan Greenberg said the company was reducing its coverage in parts of the state that were “both highly exposed, and even moderately exposed, to wildfire” because it was unable to obtain an “adequate price for the risk, and not by a small amount” due to both the costs of wildfires and California’s regulatory climate.

…..

A main solution proposed by industry is that they be allowed to use “catastrophic modeling,” a method where rates are set based on predictions of future losses, rather than recorded past losses, as is currently the case. All other states allow the use of this technique in at least some cases.

Author(s): Sam Mellins

Publication Date: 7 Feb 2022

Publication Site: The Daily Poster

Pacific Life Fined for Unlicensed Pension Risk Transfers in New York

Mary Pat Campbell

Link: https://www.ai-cio.com/news/pacific-life-fined-for-unlicensed-pension-risk-transfers-in-new-york/

Excerpt:

Pacific Life Insurance Co. has agreed to pay a $3 million fine after a New York Department of Financial Services (DFS) investigation found that the firm had conducted pension risk transfer (PRT) business in the state without a license.

It is the third enforcement action by the DFS against a major insurance company for unlicensed PRT business. In April 2020, the regulator fined Athene $45 million, and in February it fined AIG $12 million, both for conducting unauthorized pension risk transfer transactions in New York.

Author(s): Michael Katz

Publication Date: 14 Jan 2022

Publication Site: ai-CIO

Senators quiz insurers on climate-related underwriting

Mary Pat Campbell

Link: https://www.businessinsurance.com/article/20210326/NEWS06/912340735/Senators-quiz-insurers-on-climate-related-underwriting

Additional link: https://static1.squarespace.com/static/5b7c9307f79392b49031d551/t/605cf32f9d526442eb0bca0c/1616704303928/Senators%27+Letter+-+Chubb.pdf

Excerpt:

Democratic lawmakers have called on U.S. insurers including American International Group Inc., Berkshire Hathaway, Chubb Ltd., Liberty Mutual Insurance Co., MetLife Inc. and Travelers Cos. Inc. to explain how their fossil fuel underwriting policies align with their commitments to sustainability.

In a letter dated March 24, Sen. Sheldon Whitehouse, D-Rhode Island, and Senators Jeffrey A. Merkley, D-Oregon, Elizabeth Warren, D-Massachusetts, and Chris Van Hollen, D-Maryland, request information on each insurer’s fossil fuel underwriting and investment policies.

“An increasing number of your competitors have stopped underwriting coal and other fossil fuel projects and/or restricted their investments in coal and certain dirty and environmentally damaging oil and gas projects such as tar sands,” the letter said.

Excerpt:

Author(s): Claire Wilkinson

Publication Date: 26 March 2021

Publication Site: Business Insurance