Liberty Mutual to Cease Offering Business Owner's Policy in California Due to Rising Costs
Liberty Mutual to Cease Business Owner's Policy Offering in California Amid Rising Costs and Catastrophe Risks
chandni
In response to the escalating costs and increasing catastrophe losses impacting insurer profits, property and casualty giant Liberty Mutual has announced its decision to discontinue offering its business owner's policy (BOP) product in California. This move will come into effect from October 1st, indicating the challenging environment insurers are facing in pricing the heightened catastrophe risk into premiums, compounded by high inflation and regulatory obstacles.
A spokesperson for Liberty Mutual confirmed the cessation, revealing that the company will not renew its current book of this line of business starting from December. The BOP insurance product, a bundled coverage combining major property and liability risks for business owners, will no longer be available for purchase in the wildfire-prone state.
Liberty Mutual joins a growing list of major insurers retreating from the California market. Earlier this year, State Farm also announced its discontinuation of selling new insurance policies to homeowners in the state.
The shift of larger insurance carriers away from the California residential property insurance market is seen as a result of ongoing regulatory constraints, mounting cost inflation, and the impact of higher catastrophe losses, as noted by credit rating agency Fitch in a previous report. As the industry navigates these challenges, insurers are grappling with the complex task of maintaining profitability while ensuring adequate coverage for policyholders in a high-risk environment.
