Best’s Special Report: Best’s Impairment Rate and Rating Transition Study — 1977 to 2025

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best’s latest special report on the long-term impairment rates of U.S.-domiciled insurance companies states that no insurers rated by AM Best became impaired in 2025.

The Best’s Special Report, titled, “Best’s Impairment Rate and Rating Transition Study — 1977 to 2025,” covers 48 one-year periods from Dec. 31, 1977, to Dec. 31, 2025, and the term impairments refers to insurers that became impaired and had a Best’s Financial Strength Rating or Long-Term Issuer Credit Rating at the time of impairment. AM Best designates an insurer as a financially impaired company upon the public placement of the company, via public court order or other international equivalent, into conservation, rehabilitation and/or insolvent liquidation.

Because weather conditions have contributed to heightened impairments in the U.S. property/casualty industry, the report includes information about natural catastrophes that have caused impairments since 2012, with nearly all companies in this population having withdrew from the rating process prior to impairment or were never rated by AM Best. In the most recent five-year period through 2025, 22 companies became impaired due to natural catastrophes; all 13 impairments in 2021-2022 were domiciled in Florida or Louisiana and were due to hurricane losses; of the nine impairments in 2023-2025, eight were predominantly in Midwest states and driven by severe convective storm losses, with one other impairment in Florida.

To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=365724.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising 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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