Insurance Blogs

Weekly News Roundup, March 29

COVU COVU News Insurance Insurance Agency Claims Press Release Blog News Flooding
In this week's news will talk about Chubb launches flood insurance platform, Baltimore bridge collapse a "sizeable loss" for insurers, and much more…

State Farm General's credit rating downgraded

AM Best has downgraded its Financial Strength Rating (FSR) and Long-Term Issuer Credit Rating (Long-Term ICR) for State Farm General Insurance Company.

The ratings agency announced that it has lowered State Farm General’s FSR from A (excellent) to B (fair) and its Long-Term ICR from “a” (excellent) to “bb+” (fair). The rating agency has also revised its outlook for the insurer’s FSR from stable to negative. AM Best’s outlook for State Farm General’s Long-Term ICR is also negative.

The revised ratings “reflect State Farm General’s balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM),” the ratings agency said.

AM Best said the downgrades reflect “continued deterioration” in the insurer’s policyholder surplus as of Dec. 31, which drove a corresponding drop in overall risk-adjusted capitalization and “weakening balance sheet metrics.”

Illinois bill would add restrictions for insurers

In a move aimed at controlling the increasing costs of auto insurance in Illinois, lawmakers in the state’s House of Representatives have introduced legislation requiring insurers to obtain state approval before adjusting their rates.

The bill, titled House Bill 4767 or the Motor Vehicle Insurance Fairness Act, spearheaded by Representative Will Guzzardi (D-Chicago), seeks to enhance the oversight capabilities of the Illinois Department of Insurance over rate modifications. Guzzardi attempted a similar bill last year that never made it out of the House.

Alexi Giannoulias, the Illinois Secretary of State, has voiced support for the bill, highlighting its potential to equip the Department of Insurance with authority to scrutinize and regulate any proposed increases in insurance rates.

The initiative comes against the backdrop of a significant rise in Illinois auto insurance expenses, which have surged by more than $2.4 billion since the onset of 2022.

Chubb launches flood insurance platform

Chubb Personal Risk Services has announced the launch of a self-service Flood Insurance System for agents.

The new platform, which will integrate with the Chubb Agent Portal and the Masterpiece EZ Quote homeowners platform, will support Chubb’s personal lines business for primary and excess flood. It will provide quotes for low-hazard properties in less than two minutes, the company said.

The system will be available in all states where Chubb writes flood insurance, according to a news release.

“We have made a significant investment to create an exceptional quoting and issuance process for agents to ensure we can offer complete flood protection coverage options for clients,” said Louis Hobson, senior vice president of Chubb’s North American flood insurance business.

Baltimore bridge collapse – a "sizeable loss" for insurers

Insurers could be facing huge claims payouts in the wake of the Francis Scott Key Bridge collapse.

The bridge collapsed early Tuesday when a container ship, the Dali, struck a support column. Several cars went into the water, and six people are missing and presumed dead, although search efforts are ongoing, according to a CBS News report.

Claims arising from the incident could approach those from the 2012 Costa Concordia disaster, according to John Miklus, president of the American Institute of Marine Underwriters.

In that incident, the luxury cruise ship Costa Concordia capsized off the coast of Italy, killing 32 people and leading to $1.5 billion in claims payouts.

State House votes to allow insurers to drop homeowners

The Louisiana House has passed a bill granting insurers increased flexibility to cancel homeowner policies, a decision framed by proponents as a crucial step towards addressing the state’s insurance crisis.

Currently, insurers are prohibited from discontinuing coverage for homeowners who have been policyholders for a minimum of three years.

The legislation, House Bill 611, spearheaded by Representative Gabe Firment, aims to eliminate this unique three-year safeguard. Firment, a Republican from Pollock, has characterized the bill as essential for rectifying Louisiana’s distinctive position on this matter globally.

According to Nola, the measure received a vote of 72-32 in favor, with the majority of Republican lawmakers endorsing HB 611, and their Democratic counterparts dissenting.