Insurance Firm Failures Rise 30 Percent In 2000 - Brief Article

Healthcare Financial Management, July, 2001

In the face of a slowing economy and stiff competition, 35 insurance companies failed in 2000, up 30 percent over the 27 failures recorded in 1999, according to Weiss Ratings, Inc., Palm Beach Gardens, Florida. The number of HMO failures, however, dropped for the first time in five years, down 22 percent from 23 failures in 1999 to 18 failures in 2000.

Twenty-seven of the 35 insurance company failures in 2000 were property/casualty insurers. Of the 53 insurance company and HMO failures in 2000, Weiss Ratings had issued financial safety ratings on 47, rating 72 percent of them D (weak) or lower. The remaining 28 percent were rated C (fair).