California Casualty is shrinking its footprint

Home and auto insurer California Casualty is in the process of shrinking its footprint.

The insurer, which distributes its products through affinity groups in the fields of education, law enforcement, and public safety, has submitted withdrawal notices in 22 states and the District of Columbia.

“Over the last 23 years, California Casualty has grown our footprint in an effort to meet the needs of our national partner the National Education Association, and now serve members in 43 states and the District of Columbia,” California Casualty stated in one of the filings. “However, this expansion has strained our resources and we simply have not achieved the economic scale necessary to maintain a reasonable expense ratio and generate a consistent underwriting profit.”

CCG’s personal lines combined ratio increased from 102.9% in 2021 to 118.5% in 2022, primarily due to accelerating inflationary pressures. The company recorded a net loss of $80.3 million in 2022 compared to net income of $41.5 million in 2021.

The company added that it is shifting its focus from becoming a national insurance provider to “thriving in a smaller footprint” as a small number of states represent about 70% of the company’s current customers and revenues.

One consequence of this move is that California Casualty will end its 23-year relationship with the National Education Association, the largest labor union in the country which primarily represents public school teachers.

It isn’t clear if the organizations are ending their partnership in certain states or altogether, but according to the NEA Member Benefits site, California Casualty will discontinue its service in all states except California, Oregon, Colorado, Arizona, Kansas, Idaho, and Wyoming. Members residing in these seven states will have no disruption to their coverage and NEA plans to secure a new carrier partner during Q4 2023.