Georgia's Insurance Market: Profitability Crisis and Legislative Solutions

Recent findings from a committee of the Georgia House of Representatives reveal that Georgia is one of the least profitable states for insurance companies, a situation that may prompt future premium adjustments if no legislative actions are taken. The state hosts over 400 personal home and auto insurers and roughly 500 commercial lines providers, according to Rob Hoyt, a professor at the University of Georgia. However, the diminished profitability has already caused several insurers to exit the market.

Although Georgia ranks as the tenth-largest state in Property and Casualty premiums, it places almost last in insurance company profitability. Reduced profitability might lead insurers to scale back their market presence, likely increasing premium costs, exacerbated by factors like inflation and litigation expenses. The 2025 National Small Business Risk Index reported an 18% increase in average business liability claims, attributed to rising healthcare and legal costs.

Market Challenges and Potential Reforms

Insurance Agent Mike Royal noted the tough market conditions, highlighting limited competition and choices as key issues. Despite some insurers relocating resources away from Georgia, Royal is optimistic about the benefits of recent tort reforms, which have shown success in other states after a few years. Georgia's Insurance Commissioner, John King, warns of continued insurer withdrawal unless reforms are enacted. He advocates for enhanced regulatory compliance measures, including the ability to enforce heftier fines on non-compliant insurers and capping auto insurance providers' excessive profits, as successfully demonstrated in other states.

In response to these challenges, several insurers in Georgia announced rate reductions. Liberty Mutual and Citgo lowered rates by 5% for drivers in the state, while State Farm implemented a 10% decrease within the last year, as reported by the Georgia Department of Insurance. Committee Chairman Matt Reeves suggests these discussions will result in multiple legislative proposals, aiming to address the pressing issues in Georgia's insurance market.