California Announces Sustainable Insurance Strategy

California is going through an insurance crisis, largely due to the effects of natural disasters and climate change. Catastrophic weather events, higher construction costs, global inflation, and greater reinsurance premiums have pushed insurers to limit exposure or withdraw from the market completely.  

Two of the state’s largest insurance carriers, which represent over 27% of the admitted insurance market in California, and other insurers, announced they would stop issuing homeowners and commercial property policies in California. Over the past 10 years, homeowners insurance companies have performed much worse in California compared to the rest of the country. Over that time, they have a direct underwriting profit of 3.6% countrywide, compared to -13.1% in California.