Eight Insurers Exposed to 73 Percent of Homeowners Risk in Western Fire-Prone States

August 15, 2002

In seven Western fire-prone states, only eight large property and casualty insurers are exposed to 72.9 percent of the home insurance risk, according to a recent analysis by Weiss Ratings, Inc.

At year-end 2001, eight carriers commanded 83.3 percent of the market in Alaska, 76.2 percent in Colorado, 72.9 percent in Oregon, 72.8 percent in California, 70.2 percent in Arizona, 69.4 percent in New Mexico, and 68.5 percent in Utah.

Three companies—State Farm, Zurich Financial Services, and Allstate— controlled 56.4 percent of the total market share in the Western fire-prone states last year. Their combined homeowners exposure ranged from a low of 53.3 percent in Colorado to a high of 67.8 percent in Alaska.

“The concentration of the homeowners insurance market continues to accelerate,” Melissa Gannon, vice president of Weiss Ratings, Inc., commented “Not only are consumers’ choices more limited than ever before, but insurers face staggering risk in the event of just one catastrophic event.”

At year-end 2001, the top eight homeowners’ insurers in the nation controlled a record 58.4 percent of the national market, compared to only 26 percent in 1965. State Farm and Allstate, the two largest homeowners insurers in the nation, have increased their market penetration even more dramatically, up from just six percent of the national market in 1965 to 33.2 percent in 2001.

Western states ranked by acres burned from Jan. 1, 2002 to Aug. 5, 2002 according to the National Interagency Fire Center: Alaska (1,238,739); Arizona (628,738); Oregon (583,334); Colorado (387,950); New Mexico (298,076); California (259,444); and Utah (232,453).

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