Best's Special Report: Impairments in US Life/Health Insurance Industry Continued to Drop in 2021
Insurance company impairments in the U.S. life/health industry continued to drop in 2021, with two new insurers identified, compared with five and 10 impairments, respectively, in the preceding two years, according to a new AM Best report.
The Best's Special Report, titled, "2021 US Life/Health Impairments Update," states that in 2021, two life/health companies became impaired: a New Mexico-based insurer placed into liquidation and one domiciled in Arkansas that was put into rehabilitation. During the 2000-2021 study period, 182 life/health insurers became impaired. These impairments consisted of 146 insolvent liquidations, 34 rehabilitations (of which 19 were closed during the period and 15 remain open as of this report) and two conservation actions.
Accident and health insurers and health writers accounted for 69% of the impairments. Of the 182 companies that became impaired during the 2000-2021 period, 36 (20%) were rated by AM Best at some point. The low percentage of AM Best-rated life/health companies that became impaired during the 21-year period highlights the anti-selection factor in choosing to be interactively rated. Most of the impaired companies were never rated by AM Best; many others chose to opt out of the rating process once difficulties arose.
To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=330337.
A report identifying 2022 life/health impairments is expected later this year.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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