California’s home insurance market is running out of worst-case scenarios. But one threat still looms large: further pullback or even a complete exit by its biggest player by far, State Farm General .
It has been just under a year since State Farm sent state regulators a letter indicating the company was concerned about its financial stability . Its policyholder surplus, a key metric reflecting its ability to pay claims, dropped from $4 billion in 2016 to just over $1 billion last year.
An insurance company has different levers it can pull if it’s concerned about its financial state. It can stop taking new customers. It can raise its rates on current customers. It can also not renew existing customers…