Allstate follows State Farm to suspend new business pursuits in California

US retail P&C insurer  Allstate followed major rival State Farm in a move to stop writing new homeowner, condominium and commercial insurance in California.

“The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums,” the company said in a statement quoted by a slew of local and national media.

The announcement builds on a similar resignation announced late May by rival State Farm which has stopped accepting new business in all business and personal property and casualty lines save personal motor. State Farm cited a similar story with claims costs.

Combined, the two firms represented some 13.5% of the California market by premium, including 8.3% for State Farm and 5.2% for Allstate.

California insurance regulators had moved to calm customers on the homeowners market after the initial statement from State Farm, noting that it was not an announcement of non-renewal and that 115 insurance companies stand by to write residential policies throughout the state.

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