The Independent Insurance Agents of Georgia (IIAG), a professional association for independent insurance agents, has expressed concern over the escalating mass tort litigation in Georgia. The association argues that this trend is prompting insurance providers to either limit their operations in the state or exit entirely. Consequently, Georgia residents are grappling with increased insurance costs for reduced coverage.
According to a report by the IIAG, authored by its president Mike Iverson, Georgia ranks as the seventh largest insurance market in the United States, accounting for $29 billion in written premium. Despite this substantial market size, Iverson's report indicates that insurance providers are increasingly withdrawing or limiting their business in Georgia. The report reveals that over the past five years, insurance providers in Georgia have incurred losses greater than the national average. Moreover, auto liability lines in the state have proven unprofitable for nine out of the last ten years.
Iverson's report asserts that mass tort litigation is a significant factor driving up insurance costs for consumers. "Georgia has witnessed multiple billion-dollar claim settlements built on strategies from court rulings such as public liability, Holt demands, and trucking direct action (naming the insurance company as a defendant)," Iverson stated. He further added that "Undisclosed litigation funding and a host of other strategies are becoming much more common as trial attorneys seek to maximize a claim." According to Iverson, tort reform legislation could potentially benefit both Georgia's insurance market and its consumers.
In October, Insurance.com reported that insurers were exiting "high risk" states to mitigate losses from high claims. Their research placed Georgia among the top five states nationwide for policy cancellations and limited insurance options. A poll conducted by Insurance.com revealed that 16% of Georgian respondents had their homeowners' insurance policy cancelled due to their provider leaving the state. Furthermore, 25% of respondents from Georgia indicated having fewer options for home insurance.
11Alive highlighted Nationwide Insurance as one insurer tightening its operations in Georgia by demanding more documentation and implementing a longer waiting period before policy approval. Portal Insurance CEO Bradley Flowers suggested that Nationwide's strategy might be aimed at limiting the volume of new business they are accepting in Georgia. "What they've effectively done, in my opinion, is they're limiting the new business they're writing without physically saying that because when you go to an insurance agent for a car insurance quote or home insurance quote, and they take seven days to turn it around," said Flowers. "That's not conducive to getting a policy written in a certain amount of time."
Established in 1897, the IIAG serves as a trade association for independent agents, as per the organization's website. The group is committed to promoting the independent insurance agency industry and providing resources and opportunities to its members. Currently, the IIAG boasts over 4,000 members and 100 partners.