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Author: hmartin

ALIRT Update: Residual Market Trends in Four Higher Catastrophe Risk States

This article is about the recent trends and developments in residual market mechanisms within the property insurance industry in four high-risk catastrophe states: California, Florida, Louisiana, and Texas, highlighting the challenges and reforms faced due to increased weather-related losses and market instability.

Overview of Reciprocal Insurance Exchanges and Recent Market Trends

This article provides an overview of Reciprocal Insurance Exchanges (RIEs), highlighting their historical significance and recent market trends. It explores the unique organizational structure of RIEs, their financial performance, and the implications for new entrants in light of market dislocations, particularly in the U.S. property insurance markets.

American Mobile: The Short Life of a Reciprocal Insurance Exchange

This article discusses the brief history of the American Mobile Insurance Exchange (AMIE), a small insurer focused on mobile home insurance in Florida, and the factors leading to its administrative supervision and eventual run-off in 2024. Key points include the rapid rise and challenges of the reciprocal insurance exchange model, the involvement of private equity, and the impact of high reinsurance costs and inadequate coverage on AMIE’s financial stability.

BBB-rated Bond Exposure for Life Insurers

In this article, you’ll read about the significant increase in NAIC Class 2 bond holdings by U.S. life insurers since the 2008-2009 financial crisis, driven by a search for higher yields amidst stable economic conditions. The article also discusses how recent changes in risk-based capital regulations and economic challenges may impact the industry’s bond investment strategies and overall financial stability.

Fronting Companies Accredited and Sutton: A Tale of Two Troubled Parents

This ALIRT Research report explores the financial turmoil at the holding companies of Accredited and Sutton fronting insurers. Both companies faced significant challenges due to their parent companies’ financial distress, leading to ownership changes to avoid rating downgrades. The report underscores the importance of considering both the insurer and its parent company in due diligence, highlighting the complex dynamics between fronting insurers and private equity ownership.

Advantage Capital and the Fallout from 777 Re

In this report we explore ACAP’s relationship with 777 Re and the possible lingering ties that the ACAP life insurers may have to this now defunct reinsurer and its parent company 777 Partners.

Financial Struggles Deepen for the Columbian Financial Group

The two life insurers of the Columbian Financial Group (CFG), Columbian Mutual Life Insurance Company (CML) and CML subsidiary Columbian Life Insurance Company (CLIC), experienced weak and deteriorating financial positions for many years, which was driven by poor operating performance. CLIC incurred continued operating losses that have led to a low and declining risk-based capital (RBC) ratio, which was below the company action level at year-end 2023. CML also incurred sizable operating losses in three of the last four years, while CLIC’s losses and reduced surplus position also contributed to CML’s lower capitalization in aggregate and on a relative basis, given CML’s ownership of CLIC.