Only one US property and casualty (P&C) insurer was recorded as impaired in 2024, a notable reduction from the 13 impairments reported a year earlier, according to credit rating agency AM Best.
AM Best outlines the findings in its report, 2024 US P&C Impairments Update. According to AM Best, the sole impairment during 2024 involved a relatively small insurer that provided automobile physical damage-only coverage and operated primarily within the Chicago, Illinois metropolitan area.
The agency explains that the company had already stopped writing new and renewal business in 2022, and its final policy expired in April 2023.
AM Best notes that, in addition to reviewing the impairment recorded in 2024, the report also examines historical impairment activity across the US P&C sector. The AM Best study includes data on impairments occurring between 2000 and 2023 to provide broader context for the most recent figures.
Across the full period from 2000 to 2024, AM Best reports that 433 P&C in the US became impaired. This total includes 370 insolvent liquidations and 61 rehabilitations, according to AM Best. Of the rehabilitation cases, AM Best states that 45 were closed during the study period, while 16 remain open at the time of publication. AM Best also identified 59 conservatorships during the same timeframe, 57 of which ultimately progressed to either rehabilitation or liquidation.
AM Best’s analysis also considers the types of insurers most commonly affected. Workers’ compensation insurers accounted for 23% of impairments between 2000 and 2024, according to AM Best. Personal lines insurers represented 31% of cases, with private passenger auto insurers responsible for 20% and homeowners insurers making up 11%.
The agency reports that commercial lines insurers accounted for 22% of impairments, including 14% linked to other liability or commercial multiperil business and 8% involving commercial auto carriers. The remaining 23% occurred among insurers writing various specialty lines.
AM Best also reviewed the primary drivers behind a portion of the impairments. In 115 cases where a main cause was identified, AM Best found that catastrophe-related losses were the most frequently cited factor, contributing to 39 impairments. Fraud or suspected fraud ranked second, associated with 25 cases.
According to AM Best, other contributing factors included problems involving affiliated companies, operational pressures linked to rapid growth and investment-related losses.
