The number of US insurers placed into receivership in 2023 more than doubled from the previous year, according to an S&P Global Market Intelligence analysis, with property and casualty carriers once again comprising the majority of those companies.
Regulators placed 13 insurers into liquidation and five into rehabilitation in 2023, compared with eight companies going into liquidation in 2022.
Ten of the insurers placed in receivership were property and casualty (P&C) insurers, including two reinsurance companies that file P&C statement blanks to the National Association of Insurance Commissioners, and seven were managed care companies.
Weather losses hit Midwest P&C carriers
Severe weather losses were behind the demise of the Midwest-domiciled P&C carriers in the analysis. Two of the six P&C insurers that were put in liquidation and three of the four in rehabilitation in 2023 were in the Midwest.
Cameron Mutual Insurance Co. and its subsidiary Cameron National Insurance Co. were both put in rehabilitation Aug. 7 by the Missouri regulator after absorbing losses from convective storms that tore through the Midwest and Southeast. Cameron Mutual went into liquidation Dec. 1, but Cameron National remains in rehabilitation.
The same fate befell United Home Insurance Co., which was domiciled in Arkansas and wrote business in Kentucky, Missouri, Oklahoma and Tennessee. It was placed in rehabilitation Sept. 6 by Arkansas Insurance Commissioner Alan McClain after it sustained heavy weather-related losses and moved into liquidation Nov. 14.
1 loss in Florida
The Florida insurance market is showing signs of stabilizing in the wake of tort reforms included in House Bill 837, which went into effect March 24, 2023. Only one company, United Property & Casualty Insurance Co., was put in liquidation, a far cry from five insurers in 2022.
The Feb. 27 liquidation of United P&C helped its parent, United Insurance Holdings Corp., achieve its goal of reducing its footprint in the Sunshine State's homeowners market. The parent company has since rebranded itself as American Coastal Insurance Corp.
Dramatic downsizing for health insurtech
Six of the seven managed care insurers put in liquidation were subsidiaries of one company, Friday Health Plans Inc. of Denver.
The insurtech said in June that it would be winding down its business because it was unable to scale its financial infrastructure "to match the pace of our growth and secure the additional capital required to run our business." One subsidiary, Friday Health Insurance Co. Inc., had already been put in liquidation before the announcement.
By the end of the summer, Friday Health Plans of Colorado Inc., Friday Health Plans of Georgia Inc., Friday Health Plans of North Carolina Inc., Friday Health Plans of Oklahoma Inc. and Friday Health Plans of Nevada Inc. had gone into liquidation.
P&C majority again
Ten of the 18 companies in the analysis that were put in receivership in 2023 were P&C companies. Seven were managed care insurers and one was a life insurer, making it the seventh straight year that P&C companies have been in the majority in the analysis.
In 2017, seven out of the nine companies placed in receivership were P&C carriers. That figure rose to nine in 2018 and then jumped to 14 out of the 22 total insurers put into receivership in 2019. In 2020, eight of the 12 total companies placed into receivership were P&C insurers. In 2021, that figure was 11 out of 15, while in 2022 it was seven out of eight.
Of the 96 insurers placed into receivership since 2017, 66 have been P&C underwriters, 21 have been managed care insurers and nine have been life insurers.