State Farm
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The company says the recent wildfires will be the costliest in its history. -
The carrier has around $2.5bn-$4bn of reinsurance cover specifically for California risk.
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The company received over 10,100 home and auto claims as of January 27.
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A state-mandated, one-year moratorium on non-renewals is also in place.
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Insurers are fighting to recoup claims they have paid out.
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Independent litigation threatened a $4bn settlement with wildfire victims.
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The victims claim insurers shouldn’t get settlement cash before they’re made whole.
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The discrepancy between rising claim counts and favorable reserves is cause for concern.
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Mutuals struggle to react and adapt to a worsening loss environment.
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The downgrade reflects the company’s balance sheet strength, which AM Best assessed as weak.
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The carrier stopped accepting new HO business in the state last May.
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Related
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State Farm pays out over $2.5bn for LA wildfires
March 31, 2025 -
State Farm slashes P&C UW loss in 2024 to $6.1bn
March 03, 2025