A decision by one or more major insurers to stop writing new policies in an area judged too catastrophe-exposed, pushing insureds toward the insurer of last resort or the E&S market.
A market withdrawal occurs when one or more major insurers stop writing new policies, or even decline certain renewals, in a geographic area whose catastrophe risk they judge to have become incompatible with pricing the local regulator will accept, typically because that regulator caps allowed premium increases. In May 2023, State Farm, the largest US homeowners insurer, announced it would stop accepting new homeowners policies in California, citing growing wildfire exposure and rapidly rising construction and reinsurance costs; Allstate had already paused new underwriting in the state in 2022 for similar reasons. These withdrawals push affected homeowners toward the state's insurer of last resort, California's FAIR Plan, whose premiums are higher and coverage more limited, or toward the excess & surplus lines market, revealing a structural tension between rising physical climate risk and price regulators that slow the rate adjustment the private market needs to keep absorbing that risk.
In May 2023, State Farm announces it will stop writing any new homeowners policies in California, citing wildfire risk and rising reinsurance costs; affected homeowners turn to the state's FAIR Plan or the E&S market.
retrait d'assureur, non-renouvellement de masse, fuite du marché