20 of the most notable insurance carrier failures: (2024)

20 of the most notable insurance carrier failures: (1)

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Jeff Affronti 20 of the most notable insurance carrier failures: (2)

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Published May 3, 2023

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20 of the most notable insurance carrier failures:

  1. Executive Life Insurance Company (1991) - One of the largest life insurance companies in the US, it went bankrupt due to investment losses in junk bonds.
  2. Confederation Life Insurance Company (1994) - A Canadian life insurance company that went bankrupt due to a combination of mismanagement and a weak real estate market.
  3. Mutual Benefit Life Insurance Company (1991) - A US-based mutual life insurance company that went bankrupt due to bad real estate investments and poor management.
  4. First Capital Life Insurance Company (1991) - A life insurance company that went bankrupt due to high levels of junk bond investments.
  5. Penn Treaty American Corporation (2009) - A US-based long-term care insurance company that went bankrupt due to a lack of reserves to pay claims.
  6. Home Insurance Company (2003) - A US-based property and casualty insurance company that went bankrupt due to a combination of poor underwriting practices and losses from the 9/11 terrorist attacks.
  7. Reliance Insurance Company (2001) - A US-based property and casualty insurance company that went bankrupt due to a combination of mismanagement and large losses from asbestos claims.
  8. HIH Insurance (2001) - A major Australian insurance company that went bankrupt due to a combination of poor management, inadequate reserves, and fraud.
  9. Equitable Life Assurance Society (2000) - A UK-based mutual life insurance company that went bankrupt due to a combination of guaranteed annuity rate liabilities and poor investment returns.
  10. American International Group (AIG) (2008) - AIG was one of the largest insurance companies in the world when it faced financial distress during the 2008 financial crisis. The company had invested heavily in mortgage-backed securities and credit default swaps, and faced liquidity problems when the value of those investments plummeted. The US government stepped in with a bailout to prevent the company's collapse.
  11. Conseco (2002) - A US-based life and health insurance company that went bankrupt due to a combination of high-risk investments and aggressive accounting practices.
  12. Executive Risk (1997) - A US-based specialty insurance company that went bankrupt due to large losses from professional liability claims.
  13. Kemper Insurance (2001) - A US-based property and casualty insurance company that went bankrupt due to a combination of asbestos and environmental claims, along with poor investment returns.
  14. National Heritage Life Insurance Company (1999) - A US-based life insurance company that went bankrupt due to a combination of bad investments and fraudulent accounting practices.
  15. Northland Insurance Company (1990) - A US-based property and casualty insurance company that went bankrupt due to a combination of underpriced policies and bad investments.
  16. Pacific Mutual Life Insurance Company (1997) - A US-based mutual life insurance company that went bankrupt due to large losses from real estate investments and a decline in policy sales.
  17. St. Paul Fire and Marine Insurance Company (2001) - A US-based property and casualty insurance company that went bankrupt due to a combination of asbestos and environmental claims, along with poor investment returns.
  18. Standard Life Assurance Company (1990) - A UK-based life insurance company that went bankrupt due to large losses from investments in commercial property and stocks.
  19. The Equitable Life Assurance Society (1991) - A US-based life insurance company that went bankrupt due to a combination of bad investments and fraudulent accounting practices.
  20. Transit Casualty Company (1986) - A US-based property and casualty insurance company that went bankrupt due to underpriced policies and excessive risk-taking.

It's worth noting that while insurance company bankruptcies can have serious consequences for policyholders, they are relatively rare. Most insurance companies are able to weather economic downturns and other challenges without going bankrupt.

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20 of the most notable insurance carrier failures: (2024)

FAQs

What is the biggest insurance company failure? ›

Executive Life Insurance Company (1991) - One of the largest life insurance companies in the US, it went bankrupt due to investment losses in junk bonds.

Which insurance company has the most complaints? ›

The auto insurance company with the most complaints is United Automobile Insurance, which receives roughly 40 times more complaints than the average insurer its size, according to the latest NAIC complaint index.

How many insurance companies fail each year? ›

U.S. insurance company insolvencies peaked in the early 1990s, with more than 50 companies becoming insolvent in 1992 alone, according to a study by the Society of Actuaries and Canadian Institute of Actuaries. In recent years, that number has been less than 10 annually.

Which insurance company gets sued the most? ›

Between their various companies, State Farm and Allstate occupied five of the top 10 spots on the most-sued list. Also on the list are Safeco, a defendant in 880 cases; Scottsdale Insurance Company, 855; Liberty Mutual, 831; GeoVera Speciaty Insurance Company, 687; and Lexington Insurance Company, 585.

Which insurance company denies the most claims? ›

Claim denial rates by insurance company
CompanyClaim denials
UnitedHealthcare32%
Anthem23%
Aetna20%
CareSource20%
1 more row
Mar 8, 2024

What are the big 3 insurance companies? ›

  • #1: United Health Group (UNH)
  • #2: Berkshire Hathaway Inc. ( BRK.B)
  • #3: CVS Health Corp Group (CVS)
  • #4: The Cigna Group (CI)
  • #5: Elevance Health Inc. ( ELV)
  • #6: Centene (CNC)
  • #7: Ping An Insurance (PNGAY)
  • #8: Allianz (ALIZY)

Which state has 100% of their complaints come from claims? ›

While 100% of complaints in Vermont were about claims, 79% of the complaints lodged in Maryland were related to policy cost and cancellations. California was the state with the most home and auto insurance complaints, recording 772 complaints in 2019 – most of which were related to unsatisfactory settlements or offers.

Which insurance company has the fewest complaints? ›

The best car insurance
Best car insurance categoryCompany winner
Best insurance company for having few customer complaintsAmerican Family
Best insurance company for financial strengthAuto-Owners
Best insurance company for discountsAmica
Best insurance company for customer satisfactionState Farm
4 more rows

What insurance company has the least complaints? ›

Amica is the best car insurance company for California drivers when it comes to customer satisfaction, based on the low number of complaints to state regulators for a company of its size. This is based on a comparison across auto insurers in California with a NerdWallet 5.0-star rating.

What is the biggest threat to the insurance industry? ›

As the insurance sector grapples with multifaceted challenges, identifying and understanding these risk factors is the first step in crafting a resilient strategy for the future.
  1. Compliance changes. ...
  2. Cybersecurity threats. ...
  3. Technology changes. ...
  4. Climate change & other environmental factors. ...
  5. Talent shortage. ...
  6. Financial risks.
Mar 21, 2024

What is the largest insurance loss in history? ›

Top 10 Costliest World Natural Disasters By Insured Losses, 1900-2023 (1)
RankDateEvent
1Aug. 2005Hurricane Katrina
2Sept. 2022Hurricane Ian
3Mar. 11, 20112011 Tohoku Earthquake/Tsunami
4Sep. 2017Hurricane Irma
6 more rows

Why do so many insurance agents fail? ›

Insurance agents succeed when they prioritize their customers' needs over their own profits. The most commonly cited reason insurance agents fail is that they fail to listen to their customers and take the time to find the best product to suit their needs.

What is the strongest insurance brand in the world? ›

LIC emerges as the strongest global insurance brand with a steady brand value of USD 9.8 billion.

What is the hardest insurance to sell? ›

Life insurance is a very difficult product to sell. Simply getting your prospect to acknowledge and discuss the fact they are going to die is a hard first step.

What insurance company makes the most money? ›

Berkshire Hathaway is the leading insurance company by revenue. Insurance companies offer policies for losses due to accidents, health issues, property damage, and professional liability.

Has an insurance company ever lost money? ›

Yes. Just like any other industry there are individual insurance company failures. But the insurance industry has a stellar reputation for financial responsibility.

What causes insurance companies to fail? ›

If an insurance company is not well-managed, it may take on too much risk or make poor investment decisions, leading to financial losses that it is unable to recover from. This not only becomes worrisome for the policyholders but also increases the risk of making the company bankrupt.

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