ALIRT Scores Vs. A.M. Best Ratings – A Comparative Study for the U.S. P&C Industry
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U.S. Surplus Lines – 2024
A.M. Best recently released its annual review of the surplus lines industry which it has published for the last three decades. ALIRT uses this opportunity to refresh its own 50 Company Surplus Lines Composite, both to corroborate what others in the industry are seeing as well as to provide an update as of the 6 Month 2024 reporting period for this important and growing sector of the industry.
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.
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.
Annuity Surrenders Rise for U.S. Life Insurers
In this report, we discuss the increasing level of annuity surrenders, the potential risks of higher surrenders, and any offsetting factors to these risks.
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.
Privately-Owned Insurers in the U.S. Life Insurance Industry
In the wake of the 2008/2009 global financial crisis, the U.S. life insurance industry underwent a spate of business sales/exits, spin-offs, and product changes in the 2010s which has continued through the 2020s. ALIRT has discussed many of the trends and factors that contributed to this transition, and one of the most impactful developments has been the increased number of life insurance companies owned by asset managers, private investment funds, and other private investor groups.
