Berkshire Hathaway GUARD Insurance Companies Analysis
What is Berkshire Hathaway GUARD Insurance Companies?
A+ rated commercial P&C insurer with excess & surplus lines
Employees
501-1000
Founded
1983
Industry
Property Insurance
Exit Announcement Date
August 21, 2023
Financial Performance
$1,910,328,450
Market Share
0.6%
Product Features & Capabilities
- Commercial Property & Casualty Insurance
- Businessowner’s Policy
- Commercial Auto
- Commercial Umbrella
- Professional Liability
- Workers’ Compensation
- Excess & Surplus Lines
- Loss Control Services
- Medical Management
- Claims Handling
Use Cases
Protect artisan contractors with integrated property and liability coverage; Provide small business owners with bundled insurance solutions; Offer excess and surplus coverage for high-risk operations; Deliver responsive claims handling for workers’ compensation incidents; Support hotels and retail stores with industry-specific policies
Other Considerations
Rated A+ Superior by A.M. Best (as of 7/25/24); Serves specialized industries including artisan contractors and restaurants; Offers value-added loss control and medical management services; Provides tailored coverage for small businesses and high-risk operations; Backed by Berkshire Hathaway
Replacement Options
AmGUARD Insurance has announced its withdrawal from the personal lines marketplace, effective July 8, 2024. Customers affected by this exit may consider the following alternatives and replacement options:
- Transitioning to Other Insurers - Customers can look for other insurance providers that offer similar personal lines coverage. It is advisable to consult with local insurance agents who can recommend suitable alternatives based on individual needs.
- Commercial Insurance Options - Since AmGUARD is focusing on commercial insurance products, businesses may want to explore their offerings if they are eligible for commercial coverage.
- Resources from Insurance Associations - Organizations like the Professional Insurance Agents (PIA) provide resources and guidance for policyholders affected by such market changes.
- Consulting with Insurance Brokers - Engaging with insurance brokers can help customers navigate the market for personal lines and find appropriate coverage.
Impact On Customers
AmGUARD Insurance Company is exiting the California market and will no longer write personal line policies in the state. This means that customers will lose their homeowners insurance policies when they come up for renewal. Additionally, AmGUARD is barred from filing a replacement homeowners program for at least three years after the effective date of the withdrawal. Customers are advised to contact AmGUARD's customer service department for any questions or concerns regarding their policies. This exit will significantly impact customers by limiting their coverage options and potentially leading to increased premiums or reduced availability of insurance products in the market.
Exit Reason
AmGUARD Insurance is leaving California primarily due to a combination of economic, regulatory, and market factors. The company has stopped writing homeowners policies in California as of 2023, citing rising business risks, particularly related to increasing replacement costs and the inability to raise premiums adequately. This decision is part of a broader trend among insurance companies in California, which have been scaling back or exiting the state due to similar pressures.
- Financial Losses - The company has reported significant losses that are described as unusually high compared to the market, making it unsustainable to continue operations in California.
- Inflation and High Claims Volume - Economic factors such as inflation and a high volume of claims have made it increasingly difficult for insurers to operate profitably in the state.
- Wildfire Risks - The rising costs associated with home reconstruction and the heightened risk of wildfires in California have further complicated the insurance landscape, leading to a challenging environment for insurers.
- Regulatory Challenges - The regulatory environment in California complicates the approval process for rate increases, which is essential for maintaining profitability in the face of rising costs.
Overall, these factors have led AmGUARD Insurance to withdraw from the California homeowners market, affecting over 50,000 policies as they transition out.
