As storms become more frequent and intense, West Des Moines insurer IMT exits Minnesota

In the midst of its worst financial stretch in company history, IMT Insurance Co. will exit the Minnesota market, extend a pause on new business and continue to raise customers' deductibles.

The West Des Moines company announced the changes in emails to agents over the last two weeks, most recently sharing its decision to leave Minnesota in a message Monday. CEO Sean Kennedy said the company has failed to turn a profit on its Minnesota business for the last eight years.

"This was not a decision made lightly; I know this news is difficult and you may have questions," Kennedy wrote. "We appreciate your continued understanding as we work towards our business goal of restoring profitability."

IMT's changes come as carriers continue to struggle in the Midwest because of rising inflation and an increase in the severity and frequency of storms. Just this week, severe thunderstorms and hail repeatedly hit the Des Moines metro .

IMT signaled its latest moves in a July 22 YouTube video directed at agents. In explaining its financial problems, the company cited National Oceanic and Atmospheric Administration data showing that 13 storms causing at least $1 billion in damage have hit Minnesota since 2021. In the prior decade, just seven such storms hit Minnesota.

Iowa likewise has recorded 13 billion-dollar storms from 2021 through this year, after just seven such storms in the previous decade, and other Midwestern states have seen a similar trend in the fequency of severe storms.

In addition to Minnesota and Iowa, IMT provides property and casualty insurance policies in Illinois, Nebraska, South Dakota and Wisconsin — states that have also seen increasing wind and hail storms.

As the storms have become more frequent, reinsurance companies, which in exchange for a share of premiums help companies like IMT spread out their risk, have pulled away from the Midwest. The shift means IMT holds on to more of customers' premium payments but also is on the hook for a greater share of the payout for destroyed homes and damaged roofs.

The Des Moines Register has previously reported that the loss of reinsurance coverage has threatened Iowa's county mutuals . They operate in geographically limited and generally rural areas and depend on reinsurers to help cope with storms that can cause severe, concentrated damage across their coverage areas. Since 2023, at least six property and casualty companies have either entirely left Iowa or withdrawn from portions of the state.

More: Greenfield tornado damaged, destroyed at least 153 Iowa homes in roughly one minute

According to its financial reports, IMT lost $35.7 million in 2022, the worst year in its 140-year history. The company lost another $32.1 million in 2023.

"Our idea of normal is rapidly changing," Kennedy said in his July 22 YouTube video. "We don't know how to predict the weather. But we are quickly learning that unpredictability is going to be a factor."

A company spokesperson did not respond to an email asking a series of questions, including how many Minnesota customers IMT currently covers.

IMT pausing new business, raising property and casualty deductibles

IMT's latest moves come after the company made several changes since last year.

In July 2023, IMT stopped issuing new policies in Iowa and Minnesota, as well as in parts of Nebraska and North and South Dakota. The company also changed its roofing policy, offering a r educed payout for damaged roofs that are more than six years old. The company also implemented a new deductible, requiring customers to pay the first $2,000 toward repairs of wind and hail damage.

More: What to know about changes to roof coverage in your insurance policy

In addition, the company has increased rates by an average of about 36% in Iowa since 2023.

Beginning Thursday, Kennedy said the company would pause writing new policies on all personal lines of business in every state. The company also will pause new commercial policies for golf courses and mini-storage facilities and risk-only policies for multi-tenant lessors, a coverage that protects landlords from risks like lawsuits. And the company will increase deductibles for commercial property.

On Oct. 1, IMT will stop renewing policies for current customers who insure only a single home or rental property through the company. The company also warned of another "adjustment" to wind and hail deductibles at an unspecified date.

IMT was the seventh-largest homeowners' insurance provider in Iowa in 2023, according to AMBest.

Tyler Jett is an investigative reporter for the Des Moines Register. Reach him at tjett@registermedia.com , 515-284-8215, or on X at @LetsJett. He also accepts encrypted messages at tjett@proton.me.

This article originally appeared on Des Moines Register: As storms become more frequent and intense, West Des Moines insurer IMT exits Minnesota