Oklahoma's stormy weather has driven a local auto insurance company out of the state, leaving its 6,500 customers looking for a new insurance provider and 10 employees looking for new jobs.
GHS Property and Casualty Co. said it will withdraw from the Oklahoma auto insurance market primarily due to “the staggering effect of multiple natural disasters that left GHS with irreconcilable underwriting losses.”
GHS is at least the second company to reduce its exposure in the Oklahoma market in the past six months due to recent storms.
Homeowners of America Insurance Co. withdrew from Oklahoma because of local weather events, the state Insurance Department said. That withdrawal affected 2,886
Spokeswoman Nicole Amend said she couldn't provide details on GHS' storm-related losses. However, Amend said claims after an Oklahoma City hailstorm in 2010 as well as from tornadoes and heavy snow in 2011 played a major role in the firm's
“It's been difficult for them to sustain themselves,” she said.
GHS will no longer sell new auto insurance policies, and beginning Aug. 1 will not renew coverage for existing customers.
The 10 employees at GHS' Oklahoma City headquarters have been notified and will be considered for other positions, the company said. Employees displaced on Aug. 1 will be provided a separation package, as well as outplacement and transition services including job-seeking training.
The company held a market share of less than half of 1 percent (0.43 percent) in 2011, which correlates to about 6,500 Oklahoma customers.
According to a recent study commissioned by Insure.com, Oklahomans pay among the nation's highest rates for auto insurance. Violent weather and the state's large number of uninsured drivers, estimated at 24 percent of all drivers, contribute to higher rates.
However, a 2009 study by the National Association of
GHS sells only auto insurance, and operates only in Oklahoma, Amend said.
The company, founded in 1994, became a wholly owned subsidiary of Healthcare Service Corp. in 1995. Healthcare Service Corp operates its health care insurance as Blue Cross and Blue Shield of
As of Aug. 1, existing GHS auto customers will have coverage until their renewal date. Nonrenewal notices will be mailed to customers at least 60 days in advance of renewal dates to give customers and agents time to find another insurance carrier, the company said.
Customers with questions can call GHS at (888) 443-8447.
Recent notices to withdraw
These insurance companies have sent notice to the state Insurance Department of intent to withdraw from the personal lines marketplace in Oklahoma in the past six months.
• American Property and Casualty Co. and American National General Insurance Co. — Homeowners and dwelling fire markets, and withdrawing earthquake coverage due to increased hazard. Only impacts new business. No current policyholders impacted.
• Homeowners of America Insurance Co. — Homeowners and dwelling markets, 2,886 policyholders. The reason provided is adverse weather.
• American Hallmark Insurance Co. of Texas — Private passenger auto market, 220 policyholders. Small volume is the reason provided.
• Balboa Insurance Co. — Homeowners market, 184 policyholders, and personal inland marine market, 294 policyholders. Acquisition by another insurer.
• Employers Fire Insurance Co. and OneBeacon Insurance Co. — All commercial lines markets, numerous policyholders. For both insurers, the reason provided is that the companies are consolidating under Atlantic Specialty Insurance Co.