Only one U.S. property and casualty (P&C) insurer was recorded as impaired in 2024, according to credit ratings agency AM Best, a significant decrease from the 13 impaired insurers reported a year earlier.
AM Best outlines findings in its 2024 report U.S. Property and Casualty Insurance Impairment Update. According to AM Best, the only loss in 2024 involved a relatively small insurance company that only offered physical damage coverage to automobiles and operated primarily in the Chicago, Illinois, metropolitan area.
The agency explained that the company had stopped underwriting new and renewal business in 2022, and its final policy expired in April 2023.
AM Best notes that in addition to reviewing impairments recorded in 2024, the report also examines historical impairment activity in the U.S. property and casualty insurance industry. The AM Best study includes data on injuries occurring between 2000 and 2023, providing broader context for the latest data.
AM Best reports that for the entire period from 2000 to 2024, 433 property and casualty insurance companies in the United States experienced impairments. According to AM Best, this total includes 370 insolvencies and 61 reorganizations. Of the recovered cases, 45 were closed during the study period, while 16 were still open at press time, AM Best said. AM Best also identified 59 custodians in the same time frame, 57 of which ultimately entered the remediation or liquidation stages.
AM Best’s analysis also considered the types of insurance companies most commonly affected. AM Best data shows that between 2000 and 2024, workers’ compensation insurance companies accounted for 23% of losses. Personal insurance companies accounted for 31% of cases, private passenger car insurance companies accounted for 20%, and homeowners insurance companies accounted for 11%.
The agency reported that commercial insurers accounted for 22% of impairment losses, with 14% related to other liability or commercial multi-risk businesses and 8% involving commercial motor carriers. The remaining 23% occurs among insurance companies that underwrite various specialty lines.
AM Best also examines the main drivers behind some of the damage. AM Best found that of the 115 cases where a primary cause was identified, disaster-related losses were the most frequently cited factor, causing damage in 39 cases. Fraud or suspected fraud ranked second, involving 25 cases.
AM Best said other factors included issues with associated companies, operating pressures related to rapid growth and investment-related losses.
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