Georgia Insurance Market Faces Challenges but Shows Signs of Stabilization

Georgia's profitability in the insurance market ranks low nationally, which might lead to increased premiums if the situation does not improve. Insights shared with a Georgia House of Representatives committee highlighted the state's significant property and casualty premiums along with persistently low profitability. This scenario may compel insurers to limit their offerings, thereby potentially increasing rates.

Market Dynamics and Regulatory Challenges

Rob Hoyt, a risk management professor, informed the Blue-Ribbon Study Committee on Insurance Rates about the current dynamics. Georgia hosts numerous personal and commercial insurance providers, but inflation, rising medical costs, and litigation expenses have led some to exit. This trend raises concerns about regulatory compliance and market stability.

The 2025 National Small Business Risk Index data reveals that an average business liability claim now costs $97,220, reflecting an 18% increase since 2022. These rising costs are attributed to higher medical expenses and increased litigation fees. Such economic pressures may prompt further regulatory scrutiny and carrier adjustments.

Optimism Amidst Challenges

Insurance Agent Mike Royal discussed the challenging market conditions marked by reduced competition and insurer exits. However, he remains optimistic that recent tort reform legislation might stabilize the market, citing Florida's experience where similar reforms led to a 6.5% reduction in average rates. Insurance Commissioner John King advocated for stronger legislative measures, such as larger fines for non-compliance and limits on excessive auto insurer profits, to stabilize the market further.

Despite these challenges, some insurers like Liberty Mutual, Citgo, and State Farm have announced reductions in auto insurance rates in Georgia. The Georgia Department of Insurance reported these developments, and Chairman Matt Reeves expects the committee's findings to inspire legislative proposals addressing these industry challenges.