Property and casualty insurer Liberty Mutual will stop offering its business owner’s policy (BOP) product in wildfire-prone California on Oct. 1.
In addition, a spokesperson for Liberty Mutual told Reuters in an emailed statement that the company “will not renew its current book of this line of business beginning in December.”
BOP is an insurance product usually required by business owners that bundles all major property and liability risks into a single package.
Global insurers are seeing an erosion in their profitability as they struggle to price heightened catastrophe risk into premiums.
Liberty Mutual joins a growing list of major insurers pulling out of California. In May, State Farm said that it would stop selling new insurance policies to the state’s homeowners.
The continued retreat of larger insurance carriers from the California residential property insurance market offers signals to the market, according to a note earlier this year from Fitch, the credit rating agency.
Ongoing regulatory constraints, rising cost inflation and higher catastrophe losses, are among the issues the industry is facing.
(Reporting by Jaiveer Singh Shekhawat and Manya Saini in Bengaluru; editing by Shailesh Kuber)
