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California Insurers’ Inability to Price Risk Is Causing Headaches

June 7, 2023


California regulations restrict insurers from using sophisticated computer models to consider the rapidly growing wildfire risks from climate change — and that limitation is a factor pushing US insurers out of the state.

State Farm General Insurance Co. announced at the end of May that it had stopped accepting new policy applications for property and casualty insurance in California, citing in part “rapidly growing catastrophe exposure” and the challenge of managing wildfire-related losses. Allstate Corp. quietly did the same thing last year.

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