Why is my insurance company not writing new business nationwide?

**Market Fluctuations**: Nationwide and similar insurance companies are experiencing significant fluctuations in underwriting profitability due to economic volatility, leading to cautious approaches in expanding new business.

**Catastrophic Weather Events**: Rising occurrences of catastrophic weather events, such as hurricanes and wildfires, increased claim payouts, prompting insurers like Nationwide to limit exposure by ceasing new policy writings.

**Inflation Impact**: High inflation rates affect insurers' operating costs, making it more difficult for them to offer competitive rates while maintaining profitability, which can lead to an overall reduction in new business.

**Adjustable Capital**: Total adjusted capital for Nationwide grew substantially (from $21.9 billion in 2021 to $24 billion in 2022), indicating a focus on stabilizing existing business rather than taking risks on new customers in an uncertain market.

**State Regulations**: Each state has distinct legal frameworks and regulations governing the insurance business, influencing how and when insurance companies can write new policies or stop covering certain risks.

**Prequote Documentation**: Nationwide has implemented a requirement for prequote documentation for some new business lines, indicating increased scrutiny on risk assessment before potential customers can even receive quotes.

**Small Commercial Segments**: The company has paused writing new policies specifically in small commercial sectors due to the higher risk and uncertainty associated with newer or smaller businesses.

**Nonrenewals in Key Markets**: Nationwide's recent decision to nonrenew thousands of policies in areas like North Carolina reflects an overarching trend of insurers backing away from what they now perceive as high-risk markets.

**Reunderwriting Initiatives**: By reunderwriting existing personal lines and property business, Nationwide aims to better understand their risk exposure before agreeing to new policies.

**Underwriting Guidelines**: Tightening underwriting guidelines become necessary as the insurance sector faces increased losses.

This means more stringent criteria for approving new business, not just in high-risk areas but across broader categories.

**Business Model Reevaluation**: Nationwide’s decision is one of many indicating a broader reevaluation of traditional insurance models, signaling a shift to more risk-averse strategies within the industry.

**Technological Integration**: InsurTech companies are providing alternative approaches to managing risk, which forces traditional insurers like Nationwide to adjust their offerings and strategies in the competitive landscape.

**Capacity Constraints**: Insurers face capacity constraints in certain markets, meaning they don't have the financial resources to underwrite every potential customer due to past losses.

**Risk Modeling Advances**: Advances in risk modeling technology and analytics allow insurers to better predict potential losses, affecting underwriting decisions and increasing the likelihood of pausing new business in perceived high-risk areas.

**Climate Change Projections**: Long-term projections related to climate change anticipate continued increases in extreme weather, leading insurers to be more conservative in their risk appetites moving forward.

**Insurance Supply and Demand**: A limited supply of willing insurers in high-risk areas can drive prices up and lead to stricter eligibility criteria for new policyholders.

**Loss Ratios**: Private insurers, including Nationwide, track their loss ratios—claims paid out relative to premiums collected.

Rising loss ratios can trigger decisions to limit new business initiatives.

**Policyholder Behavior**: Changes in policyholder behavior, such as increased claims for minor damages, can further strain insurance resources and alter the risk assessments for writing new policies.

**Long-Term Sustainability**: The overarching aim of these changes is long-term sustainability for insurance providers, ensuring they can adequately cover claims without jeopardizing their financial stability.