The Adirondack Insurance Exchange announced its withdrawal from the New York Stock Exchange due to its deteriorating financial condition.

The company advises policyholders to seek alternative insurance coverage as soon as possible. Its subsidiary, Mountain Valley Indemnity, also issued a similar notice, stressing that the reinsurance agreement with the parent company expired on July 1.

According to AM Best, Adirondack primarily offers home and auto insurance, along with package insurance, identity theft protection, watercraft coverage, and umbrella policies. The company has been offering personal lines coverage in New York since 2006.

The New York Department of Financial Services confirmed that Adirondack is seeking to exit the state but has not yet received approval for its withdrawal plans.

A Department of Financial Services spokesperson said the department is working with Adirondack and Allstate to ensure compliance with New York laws and regulations, and to protect consumers and the state’s insurance market.

Bradford J. Lachute, director of government and industry affairs for the Professional Insurance Agents Association, noted that Adirondack has built a reputation for offering some of the cheapest policies in the New York market, a strategy that may have contributed to the company’s financial difficulties.

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Adirondack has posted annual net losses in four of the past five years, peaking at a loss of $32.5 million in 2023, according to its financial report to Best. The company’s policyholder surplus fell from $82 million in 2021 to $20.1 million in 2023.

As of the first quarter of 2024, Adirondack reported a net loss of $16.8 million and a policyholders’ surplus of $3.34 million, down from $45.6 million in the same quarter the year before.

Lachute noted that Adirondack’s rates were consistently 20% to 40% lower than those of its competitors. As the market hardened, reinsurance costs rose, and claims expenses increased, leaving Adirondack vulnerable to its strategy of lowering premiums.

While this situation may not be indicative of a broader market trend, New York insurance companies are generally tightening underwriting standards and raising premiums.

The Adirondack Insurance Exchange is operated by National General Holdings Corp, which was acquired by Allstate for $4 billion in 2021. The company is not rated by AM Best.

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