American National Group, an insurance company owned by Brookfield Asset Management Reinsurance Partners, plans to cease its homeowners insurance business in nine states, a move precipitated by declining profitability in those markets, the company told Newsweek.

The shift is part of plans to pull back in Arkansas, California, Colorado, Louisiana, Minnesota, Oklahoma, South Carolina, South Dakota and Washington, according to a company official.

American National said it is working with their agents to look into options for clients in the affected regions.

“We have notified the appropriate departments of insurance of our intent to withdraw from the homeowners business in nine states,” Scott Campbell, senior vice president, chief client experience and corporate communications officer, told Newsweek. “Several years of increased frequency and severity of weather events have caused an increased lack of profitability in this line of business.”

He added: “Inflationary pressures have also increased the cost of claims payments, which has compounded the lack of profitability.”

homeowners insurance
Firefighting helicopters fly through a smoky sky to make water drops at the Oak Fire near Mariposa, California, on July 26, 2022. Increased frequency of wildfires and extreme weather events are forcing some insurance companies…

DAVID MCNEW/AFP via Getty Images

Homeowners insurance costs have soared across the country partly due to unpredictable weather patterns, particularly in places like California, Texas and Florida, a development that has led to increased claims from customers that are hurting companies.

Major insurance firms like Allstate, Farmers and State Farm ceased providing homeowners insurance in certain states due to similar reasons behind American National’s decision. The rising cost of homeowners insurance is adding more financial burden to the housing market, amid elevated prices and high mortgage rates.

This year, customers may see their premiums rise, as companies may look to raise prices to offset the increased costs, according to Ellen Carney, principal analyst at Forrester.

“Climate adaptation, on the other hand, will become very real, as more insurers scale back activities in even more regions affected by climate change and explore new types of heat-linked policies,” she said.

Last year, homeowners saw their insurance premiums heighten by more than 21 percent, a trend that is likely to continue this year, said Pat Howard, licensed home insurance expert at Policygenius.

“Homeowners can expect rates to continue to climb in 2024 due to severe weather conditions pushing many home insurance companies to raise premiums and become more selective in who they insure,” Howard wrote recently.

“Wildfires out West, hurricanes in the South, and flooding in inland parts of the country have all contributed to home insurance companies pulling out of many states and raising premiums to counteract the outsized risk of homeowners filing claims,” he added.