American National plans to exit homeowners insurance business across nine states from the South to the West Coast.
The move was driven by significant and persistent profitability issues in the homeowners insurance market, according to a company spokesperson.
“As many other companies are experiencing, multiple factors have made it difficult to be profitable in this business, particularly in these markets, including the impact and expectation of a higher volume of severe convective storms, inflationary pressures driving up costs, increasing claims frequency and competitive market conditions,” he said.
American National plans to join a number of other insurers limiting or leaving homeowners business in California and Louisiana. It also would exit Arkansas, Colorado, Minnesota, Oklahoma, South Carolina, South Dakota and Washington, potentially starting in the second quarter.
The company sees opportunity in its annuity, life, pension risk transfer, farm and ranch and commercial property/casualty businesses and will continue focusing on growing those lines, according to the spokesperson.
Impacted homeowners policyholders will receive pre- and standard nonrenewal letters in accordance with regulatory requirements.
American National’s reasons for the planned homeowners reduction echoes reasons insurance experts recently attributed to stressed markets beyond Florida, California and Louisiana, the three states restricting or exiting business and enrollment has grown at insurers-of-last-resort, according to insurance experts. They also noted wildfire and hurricane risk and higher reinsurance and legal costs.
California is also one of 26 states impacted by a Nationwide decision to narrow its high net worth offering, according to a California Department of Insurance spokesperson.
Nationwide said the action is the first step in a plan to migrate all of its personal lines business to a single operating model and platform. Market trends are prompting Nationwide to get “more distinct and specific” about niches served as the company allocates resources more efficiently and effectively, a company spokesperson told BestWire.
Brookfield Asset Management Reinsurance Partners Ltd. acquired $5.1 billion acquisition of American National Group Inc. two years ago in a $5.1 billion deal.
Operating entities of Brookfield Reinsurance Ltd. currently have a Best’s Financial Strength Rating of A (Excellent) and A- (Excellent).
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