Progressive halts new home insurance policies in Texas and some Midwestern states | Insurify

Progressive will no longer sell new home insurance policies in Texas as of Aug. 13, according to a report from P&C Specialist. And Midwestern states like Illinois, Minnesota, Missouri, Nebraska, and Wisconsin could be next on the underwriting chopping block, P&C Specialist reported.

Progressive didn't respond to Insurify's request for comment about the situation. But CEO Tricia Griffith attached a letter to shareholders in the company's quarterly 10-Q filing.

CEO's letter to shareholders

And the report, filed with the Securities and Exchange Commission (SEC), sheds some light on the company's potential plans.

"Reducing the impact from weather-related volatility is strategically important and shifting our geographic mix continues to be a top priority," Griffith said in the letter. "We continue to focus on growing in states where weather risk is relatively lower, while maintaining or reducing our market share in higher volatile states that are more susceptible to catastrophic weather events and have higher exposure to hail."

This effort to mitigate financial loss from severe weather isn't new for Progressive. The company began implementing non-renewal notices for 115,000 property insurance policies in Florida — a state prone to loss from hurricanes and tropical storms — near the end of 2023. The initial non-renewals began going into effect during the second quarter of 2024.

"In 2021, about 45% of our policies were in less volatile states and we expect to end 2024 with about 60% of our [policies in force] in less volatile states," Griffith told shareholders.

Why pull back from Texas and the Midwest?

Roughly 40% of the storm losses Progressive faced during Q2 of 2024 occurred in Texas, according to the company's quarterly report. Another 30% of the company's losses stemmed from weather events in Colorado, Florida, Missouri, and Nebraska.

Texas experiences a variety of natural disasters, including flooding, wildfires, tornadoes, hurricanes, hailstorms, and more. Home insurers in the state paid more than $9.8 billion in direct losses in 2023, according to the Texas Department of Insurance.

Insurers in Missouri and Nebraska have also faced large insurance losses, partially due to severe weather damages. Missouri insurers paid more than $1 billion in homeowners insurance losses in 2022. And Nebraska insurers incurred more than $90 million in direct home insurance losses in 2023.

In its Q2 filing to the SEC, Progressive said the company has continued to "lower our exposure to coastal and hail-prone states for our homeowners products, which we define as our total Property business excluding renters and umbrella products."

What's next?

Though Progressive hasn't publicly commented on its reported pulling back from new insurance policies in Texas and some Midwestern states, the company has been public with its goal of decreasing its homeowners insurance footprint in areas at high risk of storm damage.

"In regions where our appetite to write new business is limited, we are continuing to prioritize Progressive auto bundles, as well as lower-risk properties, such as new construction or homes with newer roofs," Progressive said in its 10-Q filing.

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