California accounts for 11.86% of the U.S. commercial multiple peril (CMP) premium market. In fact since 2013, the total direct CMP premium written in the state has increased 71% — a clear indicator of the significant demand for insurance coverage against various risks faced by businesses in the Golden State, according to the National Association of Insurance Commissioners (NAIC).

Over the past several years, the rise in CMP premiums has significantly impacted the insurance market in California and can be attributed to a number of combined factors that include:

  • The departure of many long-standing insurance companies in the state (the exit of these major insurers has reduced the competition and resulted in substantial rate increases)
  • The state’s ongoing exposure to natural and man-made disasters and catastrophic claim events
  • The surge in rising construction and material costs
  • Growing capacity limitations in the reinsurance market
  • Reduced market capacity, particularly in catastrophe-exposed regions that have been flagged as “significantly challenged”

The NAIC Market Trend Report and Scorecard for California

The latest NAIC State Insurance Regulation Market Trend Report and Scorecard for California, particularly the data regarding the CMP market in the state, is a valuable tool for commercial insurance brokers, as it provides a wealth of helpful information in four key areas.

Market insights. Understanding the state’s market share in CMP insurance helps brokers better gauge the demand for this type of coverage and identify potential growth areas. As a result, they can adjust pricing strategies based on these trends, such as reevaluating pricing models to remain competitive.

Risk assessment. Scorecard information can be used to assess the risk landscape in the state. For example, a higher market share can indicate a significant exposure to perils such as fire, earthquake and other commercial risks in certain areas. With this market data, brokers can educate their clients about CMP coverage, highlight growing risks, tailor their insurance offerings, and present recommendations for suitable policies.

Regulatory compliance. The scorecard helps keep brokers informed about compliance trends and updates, ensuring that their practices align with and follow the industry standards and legal requirements set forth by state regulations.

Performance benchmarking. Scorecard results provide brokers with information regarding how the carriers that they write with are performing compared to others in the commercial insurance market.

As we navigate through 2024, the impact of the CMP premium market in California will continue to be significant. By monitoring California’s CMP market, brokers can gain insight into various aspects of the industry and put themselves in a better position to make highly informed decisions, enhance client services and navigate today’s ever-changing insurance landscape more effectively.

Kristi W. Dean, Managing Partner

Stone Dean LLP

Kristi is an experienced litigator and transaction attorney who represents clients in business transactions and litigation disputes. Her litigation practice focuses on trade secrets, unfair business competition, insurance law and complex business disputes, with a focus on insurance-related issues. Kristi can be reached at 818-999-2232 or

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