8 Louisiana Home Insurers Receive State Incentives But Have a History of Poor Performance

Louisiana has implemented the Insure Louisiana Incentive Program to encourage insurance companies to write more homeowner policies in the state, particularly in areas that are underserved or have limited insurance options.

However, eight home insurance companies operating in Louisiana, which receive the incentives, have continued a long history of poor business performance, above-average claims denials or both. Here’s where many of them have gone astray:

1. In the aggregate, over the last ten years, the eight insurers have reported net underwriting losses of $357 million.
2. One reason may be that they’ve outsourced a lot of their services, paying $174 million in fees to affiliates, often incurring larger expenses and effectively moving those funds out of the sight of regulators.
3. Some have tried to make up for their losses, earning $121 million on investments and other sources, but it has not been enough to offset the continuing stream of red ink in their underwriting.
4. In the process, policyholders have often gotten the raw end of the deal; most of the insurers closed a high percentage of homeowner claims with no payment whatsoever. On average, they closed 42.1% of claims with no payment in 2022, an even higher 45% in 2023, and an alarming 51.1% in 2024.

Each individual company is different, but all show signs of financial stress, cutting corners or both. Some highlights follow.

Allied Trust Insurance Company

• Since this company opened for business in 2015, it has reported net underwriting losses in every year except 2024. For the past ten years, the total net underwriting losses were $27.3 million.
• Meanwhile, Allied Trust has paid out $86.9 million in fees to affiliates.
• In 2024, the company closed 51.2% of homeowners’ claims with no payment whatsoever, up from an already high 43% of claims that were rebuffed in 2023.

Cajun Underwriters Reciprocal Exchange

• Since it began operations in 2022, the company has never reported net underwriting income. For the three-year period, its underwriting losses add up to $46.8 million.
• Compounding the situation, it has paid out $41.6 million in fees to affiliates in the same period.
• In 2024, the company closed an unusually high 53.8% of its homeowners' claims without payment, up significantly from 44.2% in 2023 and 43.4% in 2022.

Constitution Insurance Company

• In the last ten years, the company has reported net underwriting income of $13.8 million.
• During that same 10-year period, it has paid out $1 million in fees to affiliates.
• In 2022, the company closed 58.3% of homeowner claims without payment. But in 2023 and 2024, its filings show that it ceased writing homeowners’ insurance policies in 2023, while still receiving state incentives of $4.5 million.

Elevate Reciprocal Exchange

• Since it began operations in 2022, the company has never reported positive income, losing $11.7 million on its underwriting during the three years.
• In 2024, the company closed 54.9% of homeowners’ claims with no payment, up from an already high 50.5% of claims that were not paid in 2023.

Gulf States Insurance Company

• Since beginning operations in 2016, the company has reported net underwriting losses of $5.8 million.
• In 2024 alone, it paid out an unusually high $12.5 million in fees to affiliates.
• Also in 2024, the company closed 47% of its homeowners’ claims without payment, up from 24.9% in 2022.

Safepoint Insurance Co.

• Since it began operations in 2013, the company has reported total underwriting losses of $37.4 million.
• It has paid out $7.7 million in fees to affiliates, all in 2024.
• In the same year, the company closed an unusually high 51.2% of its homeowners’ claims without payment.

Safeport Insurance Co.

• In the last seven years, the company has reported net underwriting losses of $50.8 million.
• In the same seven-year period, it paid out $23.3 million in fees to affiliates.
• And in 2024, the company closed 44.5% of its homeowners’ claims with no payment.

SureChoice Underwriters Reciprocal Exchange

• Since it began operations in 2021, the company has never reported positive net income. Overall, during the period, it has reported net underwriting losses of $195.2 million.
• In each of the last three years, the company closed more than half of its homeowners’ claims with no payment: 50.4% in 2022, 51.1% in 2023 and 51.3% in 2024.

Our view: The state has a responsibility to protect both taxpayers and insurance policyholders, ensuring that funds are used efficiently, transparently and in the public’s best interest. However, the data — insurance company finances, operations and claims denials — raise serious questions about each of these goals.

About Weiss Ratings: Weiss covers 53,000 institutions and investments, including safety ratings on insurers, banks and credit unions as well as investment ratings on stocks, ETFs, mutual funds and cryptocurrencies. Since its founding in 1971, Weiss Ratings has never accepted any form of payment from rated entities for its ratings. All Weiss ratings are available at https://weissratings.com.

The U.S. Government Accountability Office (GAO) reported that the Weiss ratings of U.S. life and health insurers outperformed those of A.M. Best by 3-to-1 in warning of future financial difficulties, while also greatly outperforming those of Moody's and Standard & Poor's. The New York Times reported that Weiss “was the first to warn of the dangers and say so unambiguously.” Barron's called Weiss Ratings “the leader in identifying vulnerable companies.”