The third edition of the Global Failed Insurer Catalogue (GFIC) has just been released, documenting the insolvency of approximately 965 insurance companies worldwide between 2000 and 2024—spanning all sectors, including seven cases in Canada.

The Property and Casualty Insurance Compensation Corporation (PACICC) announced the publication on July 7. According to the GFIC, these failures occurred across 71 countries and 119 jurisdictions.

The United States alone accounts for 503 of the reported insolvency events.

In its inaugural 2023 edition, the catalogue had already listed about 547 failed insurers.

The authors caution that long stretches without insurer failures should not lead stakeholders to assume the threat has vanished. “It would be extremely risky to assume that, because no insurer has failed recently in a given jurisdiction, no future failures can happen,” says Grant Kelly, PACICC’s Chief Economist and co-author of the report alongside Judy (Zhe) Peng.

The report notes a common pattern: an initial failure is often followed by at least two more within three years in the same jurisdiction. These cluster failures have occurred 93 times across 45 jurisdictions since 2000—frequently following long periods of relative calm.

“This should serve as a sobering reminder to all financial services stakeholders of the risks of complacency,” Kelly adds.

Nearly two thirds involved P&C insurers

Close to two out of every three failures involved property and casualty insurers. The GFIC recorded 606 such failures over the past 25 years, including six in Canada. Most Canadian failures occurred between 2000 and 2003. In the United States, the P&C segment saw 331 insurer failures.

In the life and health sector, 324 insurers became insolvent over the same period—just one of them in Canada (in 2012), compared to 172 in the U.S.

Another 22 insolvencies were reported among insurers operating in both life and P&C lines, while 13 involved reinsurers.

The state of Florida stands out as the most affected jurisdiction, with 58 insurer failures. The bulk of these—46 in total—occurred in the P&C sector and were triggered by a series of catastrophic hurricanes.

Insurers can fail anywhere and anytime.
– Alister Campbell, PACICC President and CEO

A global protection gap

Most policyholders outside North America were not protected by policyholder compensation mechanisms when their insurers failed. This underscores what the authors describe as a major global gap in policyholder protection.

While the International Association of Insurance Supervisors (IAIS) continues to develop standards for regulatory best practices, “it has yet to embed an expectation regarding the existence of policyholder protection mechanisms within its core standards,” notes Alister Campbell, PACICC President and CEO.

PACICC is calling for more action to address these international protection gaps. The organization urges the IAIS to formally recognize the reality of insurer failures in unprotected jurisdictions.

“Insurers can fail anywhere and anytime. Insurance guarantee mechanisms exist in numerous countries around the world, but not everywhere,” says Campbell in PACICC’s statement accompanying the GFIC release. “They are a core component of an effective financial services safety net, and deserved to be championed by key opinion leaders such as IAIS.”