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1,273 insurers have failed globally since 2000, US accounts for 41%
A new global catalog finds US insurer insolvencies make up 522 failures since 2000, and it also estimates American policyholders are more often protected via state guaranty funds than elsewhere.
A new catalog from Canada’s Property and Casualty Insurance Compensation Corporation documents 1,273 insurer failures across 98 countries since 2000, showing the United States accounts for 522 of those failures, or 41% of the global total, according to Insurance Business.
The outlet reports that when US states are treated as separate jurisdictions, Florida ranks second globally for failures with 58 since 2000, while New York ranks third with 51. It also notes that four states, Florida, New York, Texas and Illinois, appear in the global top ten by total failures, and that New York and Florida are the only two jurisdictions worldwide where a failure occurred in more than 20 of the past 26 years.
Insurance Business adds that the frequency of failures in the US is partly influenced by the country’s size and number of insurers. Using an OECD-based insolvency rate per 1,000 active insurers, the catalog places the US in the upper half but not at the top, citing higher insolvency rates per insurer in places including Mexico, Greece, South Korea and Spain.
The catalog’s more US-specific finding is about protection coverage: Insurance Business reports that 86.6% of insurer failures in North America since 2000 occurred in jurisdictions with a policyholder protection scheme. It contrasts this with coverage rates of 34% in Europe and 5.5% in Africa, and says US states maintain their own life and property and casualty guaranty funds, creating a backstop for most American policyholders facing an insolvency.