According to the MA Assocation of Independent Agents, for every $10 consumers pay in insurance premiums, $3 goes toward paying fraudulent claims. - The Howes Insurance Agency
A 36-year-old Rochester, N.Y. man, whose Mapquest directions led police to his home, was sentenced to five years probation in Monroe County Court on Nov. 26 for trying to fraudulently obtain a $10,282 insurance settlement.
Craig C. Wilson, of 24 Alfie Dr., was sentenced by Rochester City Court Judge Thomas Rainbow Morse. Wilson pleaded guilty to insurance fraud on Sept. 17, admitting he falsely reported that his sports utility vehicle had been stolen so he could collect on an insurance claim.
Wilson was arrested by Rochester Police after authorities recovered his 2002 Mercury Mountaineer in the parking lot of a Jacksonville, Fla., apartment complex two months after he had reported it stolen. The SUV was discovered when the apartment complex owner complained to local police about the abandoned vehicle.
Investigators said Mapquest directions from Wilson's home to the Jacksonville site printed nine days before the reported theft were found inside the vehicle. They said the vehicle also contained paperwork describing airline transportation from Jacksonville to Rochester. Wilson reportedly has acquaintances in Jacksonville.
Authorities said Wilson confessed to filing the fraudulent insurance claim when he was confronted with the evidence.
The investigation was conducted by Gary S. Sullivan of the Frauds Bureau of the New York State Insurance Department and the Auto Theft Unit of the Rochester Police Department. Geico Insurance Co. assisted in the investigation.
Assistant Monroe County District Attorney Casey Spencer prosecuted the case.
Source: New York State Insurance Department
Friday, November 30, 2007
Thursday, November 29, 2007
18 of 19 Insurers Amend Mass. Rates; State Plans Outreach
November 29, 2007
Eighteen of the state's 19 Massachusetts auto insurers amended rate filings for policies with April 2008 effective dates at the state's Division of Insurance.
The latest filings lowered rates from the origianl filings made on Nov. 19.
The average reduction across 19 companies for policies effective in April 2008 is now -7.8 percent, according to state officials. It was 7.7 percent after the initial filings on Nov. 19.
"Not only are we seeing companies adjust their rates downward even more, we are also seeing them improve their array of policy offerings to stay ahead of their competitors," said Insurance Commissioner Nonnie S. Burnes. "The promise of better rates for good drivers and better products for everyone is coming to fruition in the Massachusetts auto insurance market and consumers will start to experience these benefits firsthand when they begin to shop around this winter."
Burnes said her department will be closely scrutinizing the amended filings to make certain that consumers across the state are being treated fairly. The rate review period can extend to 45 days. She sai the division will be examining each company filing to determine whether insurers are, as required, using driving record and experience for primary rating factors, refraining from drawing on banned socioeconomic factors, including education, homeownership and credit information, for rating and underwriting purposes and that the final rates are actuarially sound.
The next round of rate filings for policies with effective dates on or after May 1, 2008 can occur anytime after February 15, 2008.
"Drivers who have policies with April effective dates can expect to receive their renewal notices in the mail – and, if they are good drivers, news of lower rates – by mid-February," said Burnes.
The department is also planning to launch a website during to help jumpstart comparison shopping among the state's auto insurers. "We want consumers to be able to go to a central, trusted location so that they can make informed choices about the prices and policies that work best for them," Burnes said.
In addition to the new consumer website, Burnes said she and her staff will be conducting regional outreach among consumers, agents, legislators and other interested parties "in an effort to offer information and guidance about managed competition's new rules, inherent benefits and available resources" in the coming weeks and months, timed to coincide with the staggered issuance of renewal notices and policy effective dates.
"We want to get word out to consumers in every corner of the state about the exciting opportunity they now have to take advantage of competitive rates and innovative policies," said Burnes.
Source: Mass. DOI
Eighteen of the state's 19 Massachusetts auto insurers amended rate filings for policies with April 2008 effective dates at the state's Division of Insurance.
The latest filings lowered rates from the origianl filings made on Nov. 19.
The average reduction across 19 companies for policies effective in April 2008 is now -7.8 percent, according to state officials. It was 7.7 percent after the initial filings on Nov. 19.
"Not only are we seeing companies adjust their rates downward even more, we are also seeing them improve their array of policy offerings to stay ahead of their competitors," said Insurance Commissioner Nonnie S. Burnes. "The promise of better rates for good drivers and better products for everyone is coming to fruition in the Massachusetts auto insurance market and consumers will start to experience these benefits firsthand when they begin to shop around this winter."
Burnes said her department will be closely scrutinizing the amended filings to make certain that consumers across the state are being treated fairly. The rate review period can extend to 45 days. She sai the division will be examining each company filing to determine whether insurers are, as required, using driving record and experience for primary rating factors, refraining from drawing on banned socioeconomic factors, including education, homeownership and credit information, for rating and underwriting purposes and that the final rates are actuarially sound.
The next round of rate filings for policies with effective dates on or after May 1, 2008 can occur anytime after February 15, 2008.
"Drivers who have policies with April effective dates can expect to receive their renewal notices in the mail – and, if they are good drivers, news of lower rates – by mid-February," said Burnes.
The department is also planning to launch a website during to help jumpstart comparison shopping among the state's auto insurers. "We want consumers to be able to go to a central, trusted location so that they can make informed choices about the prices and policies that work best for them," Burnes said.
In addition to the new consumer website, Burnes said she and her staff will be conducting regional outreach among consumers, agents, legislators and other interested parties "in an effort to offer information and guidance about managed competition's new rules, inherent benefits and available resources" in the coming weeks and months, timed to coincide with the staggered issuance of renewal notices and policy effective dates.
"We want to get word out to consumers in every corner of the state about the exciting opportunity they now have to take advantage of competitive rates and innovative policies," said Burnes.
Source: Mass. DOI
Wednesday, November 28, 2007
NGM/Main Street America - Letter to Agents
November 27, 2007
Dear Valued Massachusetts Customer:
I am please to inform you earlier today we completed our filing with the Commonwealth of Massachusetts Division of Insurance (DOI) for private passenger auto rate and product changes that will be effective April 1, 2008 (pending DOI approval), in conjunction with implementation of the commonwealth's competitive auto market.
While the initial filing date for all carriers was November 19, 2007, we decided to hold our communications until today to ensure all of our customers receive the most accurate information about our important changes that will impact your and your customers.
Highlights of our changes, which will apply to our NGM Insurance Company private passenger auto products for both new and renewal business in The Bay State, include:
Dear Valued Massachusetts Customer:
I am please to inform you earlier today we completed our filing with the Commonwealth of Massachusetts Division of Insurance (DOI) for private passenger auto rate and product changes that will be effective April 1, 2008 (pending DOI approval), in conjunction with implementation of the commonwealth's competitive auto market.
While the initial filing date for all carriers was November 19, 2007, we decided to hold our communications until today to ensure all of our customers receive the most accurate information about our important changes that will impact your and your customers.
Highlights of our changes, which will apply to our NGM Insurance Company private passenger auto products for both new and renewal business in The Bay State, include:
- 7.6% decrease on existing NGM personal auto policies
- Approximately 40% of our current policyholders will receive a decrease of 15% or more on their NGM auto policy
- Another 30% of our customers will see decreases of up to 15%.
We are also implementing 10 pricing tiers that will provide pricing flexibility and the opportunity to more accurately reflect savings for a wide variety of Massachusetts drivers. Our tiering components will include discounts for:
- Multi-policy
- Coverage package
- Number of drivers
- Vehicle age for liability coverage
- Student away at school
- Farm use
- No lapse in coverage
- Good student
- Safe Driver Insurance Plan (SDIP)
In regards to SDIP changes, Class 10 will be broken into seven groups by range of years driving and Classes 17 & 18 will be broken into individual years of driving.
On April 1, we are also going to introduce our new Auto Elite program that provides many features our customer focus groups indicated they wanted for their private passenger auto customers. This includes accident forgiveness, new car replacement coverage and disappearing deductible.
We will continue to monitor all carriers' filing with the DOI and are committed to put our vast experience in competitive auto markets to work for your and your customers. Within the near future, we will provide you with more information about our existing changes and will plan to also meet with you in 2008 to discuss strategies that you help you take advantage of these opportunities.
As always, thank for your continued business with The Main Street America Group.
Sincerely,
Steven T. Berry, New England Region President
Safety Insurance Revised Auto Insurance Filing
We received a memo from Safety Insurance itemizing their revised private passenger automobile rate filing - Revised November 27, 2007
Per Safety's memo:
With this revision more than 87% of all drivers will see a rate decrease. Safety's revised rate filing will provide your agency with an extremely competitive private passenger automobile product that includes the following:
Per Safety's memo:
With this revision more than 87% of all drivers will see a rate decrease. Safety's revised rate filing will provide your agency with an extremely competitive private passenger automobile product that includes the following:
- Account credit of 10%
- Multi-Car Discount of 10%
- NEW! Loyalty/Renewal Discount now increased to 8%
- NEW! Hybrid Vehicle Discount of 10%
- NEW! Good Student Discount of 10%
- NEW! Student Away at School Discount of 10%
- The "Safety Shield", a broad coverage enhancement endorsement
- Auto Loan/Lease Gap coverage endorsement
- Merit Rating Plan enhancements include SDIP Step 99 credit increase from 17% to 25%, SDIP Step 98 credit increase from 7% to 15% and (NEW!) reduced surcharge factors for operators with 1, 2 or 3 SDIP steps from 15% to 10% for each step.
Starting April 1 2008, Safety will begin offering a combined billing option for policyholders that wish to have all of their Safety Insurance policies combined onto a single bill.
Auto insurance rates cut again
Wednesday, November 28, 2007
By DAN RING dring@repub.com (The Republican)
BOSTON - Auto insurers yesterday filed a second round of rates that could mean substantial savings for good drivers in Western Massachusetts.
Insurance Commissioner Nonnie S. Burnes said seven insurers offered significant rate cuts from last week's first round of filings. Ten companies made no changes to average rate reductions, while two offered insignificant cuts.
"This is another chapter ... in the story of an improving auto insurance market that will really deliver benefits to consumers," Burnes said last night in a conference call with reporters. "We are seeing substantial reductions for good drivers."
Insurers filed an initial round of rates on Nov. 19 under the state's new competitive system for auto coverage.
Insurers looked at the rates filed by competitors last week and were given until yesterday to respond with new rates.
"What is important in these filings is to see the movement of seven companies to try to be competitive for customers in a new market," Burnes said.
Eighteen of the state's 19 auto insurers yesterday filed amended packages for rates that take effect on April 1.
The average statewide rate reduction is 7.8 percent, a tiny change from last week, Burnes said. That would mean a reduction of about $90.50 for a good driver from Springfield who drives a 2003 Toyota Camry with a $500 deductible on collision coverage.
This year, under the old regulated system, rates fell by an average 11. 7 percent.
Critics are concerned that elderly, teenage and urban drivers will face higher rates in the new system.
Burnes said the state's 4 million drivers must look around for the best rates. She said motorists also need to need to consider discounts and policy enhancements that could further cut premiums. Some companies are offering discounts for customers who have both auto and home insurance policies with them, for example.
Burnes said the Division of Insurance will soon update its Web site with sample policies and tips for consumers.
In yesterday's filings, rates were further dropped by some key companies that write auto insurance in Western Massachusetts. Arbella Mutual Insurance of Quincy, for example, yesterday said the average rate would drop by 7.7 percent, down from last week's 6.2 percent reduction.
Arbella's filing also showed that a third of its customers could see rate cuts of 20 percent or more, and more than half could see a decrease greater than 10 percent.
Safety Insurance in Boston filed an average rate reduction yesterday of 6.3 percent, down from a 6.1 percent decrease filed last week.
Plymouth Rock Assurance Corp. of Boston yesterday filed an average rate cut of 7.3 percent, down from 3.8 percent last week.
OneBeacon Auto Insurance in Canton filed a 7.2 percent average rate cut yesterday, down from just a 2.1 percent decrease last week.
Commerce Insurance of Webster, the state's largest auto insurer, was among those companies that didn't change their average rate reductions from last week. Commerce is offering an average rate reduction of 8.1 percent.
Hanover Insurance of Worcester, which has about 20,000 policyholders in Franklin, Hampden, Hampshire counties, filed an average rate cut of 8.1 percent, down from 8 percent last week.
Burnes is overhauling the way auto insurance rates are set in Massachusetts. Insurers are now setting their own rates, subject to review by the state. Previously, the state established one set of rates that each company charged.
Burnes yesterday declined to respond in detail to criticism by the state's attorney general.
In a bulletin sent to insurance companies, Attorney General Martha M. Coakley urged companies to file lower rates. Coakley said the preliminary filings last week included more than $200 million in extra profits and payments to agents that wouldn't have been permitted when the state set rates.
Coakley said the average statewide cut in premiums was 6 percent for next year, not the 7.7 percent estimated by Burnes last week.
"We've looked at that," the insurance commissioner said yesterday. "We haven't been able to discern why she is saying that."
The 7.7 percent cut included discounts, resulting in a faulty comparison to this year's rates, Coakley said. Discounts were considered additions in the old system and weren't used in calculating statewide average cuts, she said.
According to Amie M. Breton, a spokeswoman for Coakley, the attorney general has until Dec. 9 to complete a review of the filings of auto insurers. Coakley must decide whether to challenge any of the insurers' rates in a trial-like proceeding before Burnes.
By DAN RING dring@repub.com (The Republican)
BOSTON - Auto insurers yesterday filed a second round of rates that could mean substantial savings for good drivers in Western Massachusetts.
Insurance Commissioner Nonnie S. Burnes said seven insurers offered significant rate cuts from last week's first round of filings. Ten companies made no changes to average rate reductions, while two offered insignificant cuts.
"This is another chapter ... in the story of an improving auto insurance market that will really deliver benefits to consumers," Burnes said last night in a conference call with reporters. "We are seeing substantial reductions for good drivers."
Insurers filed an initial round of rates on Nov. 19 under the state's new competitive system for auto coverage.
Insurers looked at the rates filed by competitors last week and were given until yesterday to respond with new rates.
"What is important in these filings is to see the movement of seven companies to try to be competitive for customers in a new market," Burnes said.
Eighteen of the state's 19 auto insurers yesterday filed amended packages for rates that take effect on April 1.
The average statewide rate reduction is 7.8 percent, a tiny change from last week, Burnes said. That would mean a reduction of about $90.50 for a good driver from Springfield who drives a 2003 Toyota Camry with a $500 deductible on collision coverage.
This year, under the old regulated system, rates fell by an average 11. 7 percent.
Critics are concerned that elderly, teenage and urban drivers will face higher rates in the new system.
Burnes said the state's 4 million drivers must look around for the best rates. She said motorists also need to need to consider discounts and policy enhancements that could further cut premiums. Some companies are offering discounts for customers who have both auto and home insurance policies with them, for example.
Burnes said the Division of Insurance will soon update its Web site with sample policies and tips for consumers.
In yesterday's filings, rates were further dropped by some key companies that write auto insurance in Western Massachusetts. Arbella Mutual Insurance of Quincy, for example, yesterday said the average rate would drop by 7.7 percent, down from last week's 6.2 percent reduction.
Arbella's filing also showed that a third of its customers could see rate cuts of 20 percent or more, and more than half could see a decrease greater than 10 percent.
Safety Insurance in Boston filed an average rate reduction yesterday of 6.3 percent, down from a 6.1 percent decrease filed last week.
Plymouth Rock Assurance Corp. of Boston yesterday filed an average rate cut of 7.3 percent, down from 3.8 percent last week.
OneBeacon Auto Insurance in Canton filed a 7.2 percent average rate cut yesterday, down from just a 2.1 percent decrease last week.
Commerce Insurance of Webster, the state's largest auto insurer, was among those companies that didn't change their average rate reductions from last week. Commerce is offering an average rate reduction of 8.1 percent.
Hanover Insurance of Worcester, which has about 20,000 policyholders in Franklin, Hampden, Hampshire counties, filed an average rate cut of 8.1 percent, down from 8 percent last week.
Burnes is overhauling the way auto insurance rates are set in Massachusetts. Insurers are now setting their own rates, subject to review by the state. Previously, the state established one set of rates that each company charged.
Burnes yesterday declined to respond in detail to criticism by the state's attorney general.
In a bulletin sent to insurance companies, Attorney General Martha M. Coakley urged companies to file lower rates. Coakley said the preliminary filings last week included more than $200 million in extra profits and payments to agents that wouldn't have been permitted when the state set rates.
Coakley said the average statewide cut in premiums was 6 percent for next year, not the 7.7 percent estimated by Burnes last week.
"We've looked at that," the insurance commissioner said yesterday. "We haven't been able to discern why she is saying that."
The 7.7 percent cut included discounts, resulting in a faulty comparison to this year's rates, Coakley said. Discounts were considered additions in the old system and weren't used in calculating statewide average cuts, she said.
According to Amie M. Breton, a spokeswoman for Coakley, the attorney general has until Dec. 9 to complete a review of the filings of auto insurers. Coakley must decide whether to challenge any of the insurers' rates in a trial-like proceeding before Burnes.
Tuesday, November 27, 2007
Letter from Plymouth Rock to Agents
Dear Greg,
As promised in my November 19th email to you, we have reviewed our competitive position and today amended our rate filing to reflect an overall decrease of 7.3%. We now expect over 70% of Plymouth Rock customers to see a rate decrease beginning in April. Rates for some customers will decrease by 20% or more and the average reduction for our existing customers will be about 9.2%.
Our filing incorporates three changes. First, as was done in the filings of our competitors we have quantified the impact of our new discounts on our overall rate level. In addition, our amended filing includes two new rating variables that will significantly improve our competitiveness. We will offer a 5% discount to qualified policyholders who are members of approved motor clubs. Further, we will extend the same Plymouth Rock customer loyalty pricing incentives to your non-Plymouth Rock customers. These incentives will credit these customers for the time they have been with your agency in the same manner as if they had been with Plymouth Rock. This will greatly facilitate your remarketing efforts since you can now offer your loyal accounts the same attractive pricing that Plymouth Rock customers will enjoy, regardless of their prior carrier.
As I explained last week, our strategy is designed to minimize market disruption, maximize retention of existing Plymouth Rock customers, and attract profitable new business. Our revised filing exemplifies our commitment to provide you with a competitive product. These changes complement the discounts introduced last week for completing an Advanced Driver Training course, being a Good Student or a Student Away at School. As was described more fully last week, we will also provide several key benefits like OEM coverage, Replacement Cost, Accident Forgiveness, and Deductible Dollars endorsements.
Many of you have asked about our plans for the Plymouth Rock Real Time Bonus plan in the new environment. We do plan on continuing this program in some form next year. As you know, Real Time provides you with an opportunity to increase your commission on new business and we expect this to be of continued significance next year. As the details of this program under Managed Competition are finalized we will provide additional information.
Every carrier’s submission to the Division of Insurance must be reviewed and approvals aren’t expected until the end of January. I expect that there will be some further changes required in some rate filings and more submissions made over the course of 2008 as companies fine-tune their product offerings and prices. As always, we will continue to monitor ongoing developments and keep you informed. Over the coming months we intend to offer additional value added services that will make us even more competitive for your existing customers as well as new business. We will keep you informed as our plans unfold.
I am confident you will find us to be an extremely attractive market with competitive prices, innovative product features and of course, outstanding service, backed by our industry leading True Service® Pledge. I am always interested to hear your feedback and suggestions on how we can grow together. Please do not hesitate to contact me or share your ideas with your marketing representative. I look forward to seeing many of our agents at Gillette Stadium tomorrow where several of our New Jersey agents will share their insight and experiences in moving to a more competitive market.
Thank you again for your continued support.
Hal Belodoff
As promised in my November 19th email to you, we have reviewed our competitive position and today amended our rate filing to reflect an overall decrease of 7.3%. We now expect over 70% of Plymouth Rock customers to see a rate decrease beginning in April. Rates for some customers will decrease by 20% or more and the average reduction for our existing customers will be about 9.2%.
Our filing incorporates three changes. First, as was done in the filings of our competitors we have quantified the impact of our new discounts on our overall rate level. In addition, our amended filing includes two new rating variables that will significantly improve our competitiveness. We will offer a 5% discount to qualified policyholders who are members of approved motor clubs. Further, we will extend the same Plymouth Rock customer loyalty pricing incentives to your non-Plymouth Rock customers. These incentives will credit these customers for the time they have been with your agency in the same manner as if they had been with Plymouth Rock. This will greatly facilitate your remarketing efforts since you can now offer your loyal accounts the same attractive pricing that Plymouth Rock customers will enjoy, regardless of their prior carrier.
As I explained last week, our strategy is designed to minimize market disruption, maximize retention of existing Plymouth Rock customers, and attract profitable new business. Our revised filing exemplifies our commitment to provide you with a competitive product. These changes complement the discounts introduced last week for completing an Advanced Driver Training course, being a Good Student or a Student Away at School. As was described more fully last week, we will also provide several key benefits like OEM coverage, Replacement Cost, Accident Forgiveness, and Deductible Dollars endorsements.
Many of you have asked about our plans for the Plymouth Rock Real Time Bonus plan in the new environment. We do plan on continuing this program in some form next year. As you know, Real Time provides you with an opportunity to increase your commission on new business and we expect this to be of continued significance next year. As the details of this program under Managed Competition are finalized we will provide additional information.
Every carrier’s submission to the Division of Insurance must be reviewed and approvals aren’t expected until the end of January. I expect that there will be some further changes required in some rate filings and more submissions made over the course of 2008 as companies fine-tune their product offerings and prices. As always, we will continue to monitor ongoing developments and keep you informed. Over the coming months we intend to offer additional value added services that will make us even more competitive for your existing customers as well as new business. We will keep you informed as our plans unfold.
I am confident you will find us to be an extremely attractive market with competitive prices, innovative product features and of course, outstanding service, backed by our industry leading True Service® Pledge. I am always interested to hear your feedback and suggestions on how we can grow together. Please do not hesitate to contact me or share your ideas with your marketing representative. I look forward to seeing many of our agents at Gillette Stadium tomorrow where several of our New Jersey agents will share their insight and experiences in moving to a more competitive market.
Thank you again for your continued support.
Hal Belodoff
Quincy Mutual's Letter to Agents
To: Quincy Mutual Agents November 27, 2007
MASSACHUSETTS AUTO FILING
Last week we provided you an outline of our filing for policies effective April 1, 2008. As details of the industry’s rate changes began to appear, we were quite pleased that Quincy Mutual would be offering one of the most competitive automobile programs next year. Our overall rate decrease of 10% is one of the best and was the lowest of any agency writing company. We look forward to having you and your customers take advantage of the good news.
Today represents an additional opportunity for all carriers to amend their original filing and we suspect several carriers will do so. We will not amend the rate portion of the filing we submitted. We have, however, filed to expand our Customer Loyalty Credit by applying the discount on new business where we currently have an existing Quincy homeowners policy or when the insured is in the Fair Plan. A new benefit, Replacement Cost Coverage for new vehicles, is also being filed today for a new vehicle involved in a total loss within the first 12 months and with less than 15,000 miles.
Filing Highlights:
Overall 10% rate decrease
Adoption of a revised Class Plan which further breaks out years of driving experience for those previously in the Class 10 category, offering a greater discount to the most experienced operators.
While maintaining the structure of the SDIP program we will provide an additional 3% discount for steps 99 and 98.
The Multi Car discount will be increased from 5% to 10%.
A “Customer Loyalty Credit” is available to selected classes of business: A 4% discount for renewal policyholders where we have had their automobile coverage for at least one year. A 4% credit is available to new business where we have had a homeowners policy (all forms) in force for at least one year, or where you have placed the home in the Fair Plan.
A 5% discount will apply when a rated operator has completed an approved Advanced Driver Training Course.
Replacement Cost for new vehicles involved in a total loss within the first 12 months and with less than 15,000 miles.
Placing your customers with Quincy Mutual will be the right choice. Our history of superior service, over 60 years as an A+ rated company, and our commitment to Massachusetts makes us a logical partner to grow your business. Please accept our deep appreciation for your continuing support and our best wishes during this holiday season.
Kevin M. Meskell
Executive Vice President
MASSACHUSETTS AUTO FILING
Last week we provided you an outline of our filing for policies effective April 1, 2008. As details of the industry’s rate changes began to appear, we were quite pleased that Quincy Mutual would be offering one of the most competitive automobile programs next year. Our overall rate decrease of 10% is one of the best and was the lowest of any agency writing company. We look forward to having you and your customers take advantage of the good news.
Today represents an additional opportunity for all carriers to amend their original filing and we suspect several carriers will do so. We will not amend the rate portion of the filing we submitted. We have, however, filed to expand our Customer Loyalty Credit by applying the discount on new business where we currently have an existing Quincy homeowners policy or when the insured is in the Fair Plan. A new benefit, Replacement Cost Coverage for new vehicles, is also being filed today for a new vehicle involved in a total loss within the first 12 months and with less than 15,000 miles.
Filing Highlights:
Overall 10% rate decrease
Adoption of a revised Class Plan which further breaks out years of driving experience for those previously in the Class 10 category, offering a greater discount to the most experienced operators.
While maintaining the structure of the SDIP program we will provide an additional 3% discount for steps 99 and 98.
The Multi Car discount will be increased from 5% to 10%.
A “Customer Loyalty Credit” is available to selected classes of business: A 4% discount for renewal policyholders where we have had their automobile coverage for at least one year. A 4% credit is available to new business where we have had a homeowners policy (all forms) in force for at least one year, or where you have placed the home in the Fair Plan.
A 5% discount will apply when a rated operator has completed an approved Advanced Driver Training Course.
Replacement Cost for new vehicles involved in a total loss within the first 12 months and with less than 15,000 miles.
Placing your customers with Quincy Mutual will be the right choice. Our history of superior service, over 60 years as an A+ rated company, and our commitment to Massachusetts makes us a logical partner to grow your business. Please accept our deep appreciation for your continuing support and our best wishes during this holiday season.
Kevin M. Meskell
Executive Vice President
Take inventory of your valuables
By David Colman Special Columnist
Sunday, November 25, 2007
Can you name all the valuables in your home? You might remember Grandma Betty's pearls and the antique dresser in the foyer, but what about the make and model of the kids' computer? Or how much would it cost to replace all the tools in the garage?
An inventory of your belongings is vital if you have homeowner's or renter's insurance and you want to recover your losses from a fire, tornado, flood or burglary.
Just ask the 1,800 homeowners and renters in the Southern California hills devastated by the recent brush fires, or the victims of the tornadoes that have ravaged the Southern and Mid-Western states this year.
A detailed home inventory should include an itemized description of your belongings room-by-room and photos or video of the items in each room.
Home inventory software is available free from the Georgia Insurance Information Service at www.giis.org. Find the blue button on the left side of the screen, click on the "download" button and follow the directions.
After the software is installed, a separate section can be created for each room in your home. Identify each item and fill in the information about its description, initial cost, where purchased and manufacturer, make and model and serial numbers, if possible. After your items are entered, you also can add digital pictures of each item.
At the low end of the technology scale, just use a note pad and list each room.
Then list columns with the same headings as discussed in the inventory program.
Remember to take pictures all the way around the outside of your home to document how the building looked before the incident so it can be rebuilt the way it was.
Under a renter's or homeowner's policy, your belongings can be covered in two ways: actual cash value or replacement cost. There is a significant difference between the two.
ACTUAL CASH VALUE is less expensive when purchasing your policy, but each item claimed in your loss is depreciated based on its age and condition. For instance, your reimbursement for a 5-year-old 26-inch TV would be pennies on the dollar.
REPLACEMENT COST COVERAGE would allow the policyholder to replace the item and then be reimbursed by the insurer for its cost.
David Colmans is the executive director of the Georgia Insurance Information Service, a nonprofit, nonlobbying trade association of property and casualty insurers doing business in Georgia. Contact him at dcolmans@giis.org.
From the Monday, November 26, 2007 edition of the Augusta Chronicle
Sunday, November 25, 2007
Can you name all the valuables in your home? You might remember Grandma Betty's pearls and the antique dresser in the foyer, but what about the make and model of the kids' computer? Or how much would it cost to replace all the tools in the garage?
An inventory of your belongings is vital if you have homeowner's or renter's insurance and you want to recover your losses from a fire, tornado, flood or burglary.
Just ask the 1,800 homeowners and renters in the Southern California hills devastated by the recent brush fires, or the victims of the tornadoes that have ravaged the Southern and Mid-Western states this year.
A detailed home inventory should include an itemized description of your belongings room-by-room and photos or video of the items in each room.
Home inventory software is available free from the Georgia Insurance Information Service at www.giis.org. Find the blue button on the left side of the screen, click on the "download" button and follow the directions.
After the software is installed, a separate section can be created for each room in your home. Identify each item and fill in the information about its description, initial cost, where purchased and manufacturer, make and model and serial numbers, if possible. After your items are entered, you also can add digital pictures of each item.
At the low end of the technology scale, just use a note pad and list each room.
Then list columns with the same headings as discussed in the inventory program.
Remember to take pictures all the way around the outside of your home to document how the building looked before the incident so it can be rebuilt the way it was.
Under a renter's or homeowner's policy, your belongings can be covered in two ways: actual cash value or replacement cost. There is a significant difference between the two.
ACTUAL CASH VALUE is less expensive when purchasing your policy, but each item claimed in your loss is depreciated based on its age and condition. For instance, your reimbursement for a 5-year-old 26-inch TV would be pennies on the dollar.
REPLACEMENT COST COVERAGE would allow the policyholder to replace the item and then be reimbursed by the insurer for its cost.
David Colmans is the executive director of the Georgia Insurance Information Service, a nonprofit, nonlobbying trade association of property and casualty insurers doing business in Georgia. Contact him at dcolmans@giis.org.
From the Monday, November 26, 2007 edition of the Augusta Chronicle
Friday, November 23, 2007
Mass Drivers Get Taste of Competition; Insurers Cut Rates, Enhance Competition
Drivers with good driving records, good grades, hybrid vehicles, property policies and pets are among those who could benefit under auto insurance rating plans filed for use in 2008 in Massachusetts.
Indeeed, most drivers should see savings next year. According to rate filings submitted to the state by insurers on Nov. 19, from 70% to 80% of all drivers should see rate decreases beginning in April 2008 when the new managed competition system goes into effect. For the rest, rate hikes up to 10% are possible.
The average rate decrease across all 19 insurers for all drivers statewide is about 7.7% but some drivers could see bigger rate reductions, as much as 20%, 30% and 35%.
Not only should the majority of drivers enjoy lower rates in 2008, but many could also get increased benefits while paying less.
Fourth-largest writer Liberty Mutual said its best customers could enjoy up to a 35% reduction, while the top writer Commerce and ninth largest Hanover said they will cut rates by as much as 30% for their best risks.
Travelers of Massachusetts (Premier) says approximately 75% of its customers will save money, with more than a third saving greater than 10% and some customers 20% or more.
At MetLife Auto & Home, about 74% are getting decreases, with the best risks saving up to 20% or more. Rates will go up 5% or less for about 19% while 4% of MetLife accounts will see increases over 5%.
Encompass, which insures about 2.5% of the market, says not only will nearly one-quarter of its customers receive decreases better than 10%, but also not a single current customer will see any increase.
Average statewide rate reductions filed by the top 10 carriers (with their market share) are:
Company Average Decrease
Commerce (31.6% share) 8.1%
Safety (11.2%) 6.9%
Arbella Mutual (9.3%) 6.2%
Liberty Mutual (7.9%) 10.7%
MetLife Auto & Home (6.9%) 5%
Premier /Travelers (6.6%) 6.0%
Plymouth Rock (5.7%) 4.0%
Amica Mutual (3.8%) 7.9%
Hanover (3.6%) 7.5%
USAA (2.6%) 15%
Companies writing under 1% of the market previously filed for an average 2.5% rate reduction. These include Norfolk & Dedham Group, Allianz Insurance Group, State Farm and American National Financial Group. Another in this group, Electric Insurance Group, submitted its own filing for an average 5% decrease and savings of up to 30% for some drivers.
Frank Mancini, president and CEO of the Massachusetts Association of Insurance Agents, said the first day of rate filings represents "good start" for the new system and he was pleased to see the state's independent agency companies being competitive in their offerings.
But Mancini stressed that the statewide average rate decrease is not the entire story. According to Mancini, customers and their agents will "need to look at more than rates" to determine the best deal.
Indeed, carriers signaled their desire to keep their current customers and compete for the best new business with more than just rate cuts. They are proposing deep discounts, coverages add-ons, additional services and even disappearing deductibles - features they have been making available in other states for years.
"New product features and new discounts - this is what competition brings to drivers," said James MacPhee, Liberty Mutual senior vice president and general manager for New England. "Accident forgiveness? Not in Massachusetts before managed competition. Under the old rate-setting system, consumers did not see companies enhancing their products or providing new discounts."
According to Vincent Nieroda, president of The Hanover's Massachusetts personal lines group, this is just the beginning. "Even though competition is just getting under way and Massachusetts drivers will realize significant savings now, many more benefits will evolve over time, as new companies enter the market, new products are introduced and companies fight for market share," he said.
Which drivers companies consider their best customers and therefore eligible for the biggest savings and added benefits depends on driving record but also involves other factors including their relationship with the carrier and other insurance policies they might own.
Carriers are not permitted to utilize socioeconomic factors such as home ownership, credit scores or income in their rates or underwriting, but they are offering discounts and credits to the drivers most likely benefit if those factors were permitted.
For example, a number of insurers are offering discounts to those who also have a home, condo or tenant policy with them. Carriers are circumventing the ban on home ownership as a rating factor by offering the discount to anyone with a property insurance policy (including tenants) and not just home owners. Commerce will even extend this discount to insureds with property insured in the residual market, the FAIR Plan, as well as with its own company.
Most insurers are also giving discounts to those insuring more than one car.
Insurers will be looking closely at driving records. Hanover Insurance is proposing to cut the state's six year surcharge period for accidents and convictions to three years for its customers, while Safety and MetLife Auto & Home want to recognize excellent drivers based on their merit ratings.
Several companies, including Encompass, Hanover and Liberty Mutual, are proposing accident forgiveness.
Those who pass a driver's education course stand to benefit, too, under several insurers' plans.
Loyal customers who have been with them for years (Safety, Amica, Commerce); those with low mileage (Electric, Liberty Mutual); even households with students who earn good grades (Amica, Travelers of Mass., MetLife Auto & Home) are also eligible for breaks from some carriers.
Policyholders who buy a policy from Encompass at least seven days before their current policy expires can get a break from that carrier.
Travelers of Mass. (Premier) will save owners of hybrid cars some green.
In addition to dangling discounts and credits in front of customers, companies say they will compete by offering additional coverages. These include disappearing deductibles (Hanover, Safety, Amica); new car replacement coverage (Commerce, Safety, Amica, Liberty Mutual, Hanover, MetLife Auto & Home); auto loan/lease gap coverage (Hanover, Safety, Amica, Encompass) and enhanced towing and substitute transportation.
MetLife Auto & Home is throwing in identify theft resolution protection for free.
Market leader Commerce, which will continue its popular program of discounts to members of the American Automobile Association, wants to enhance that package by also offering these AAA members coverage for laptops and cell phones and coverage if their pet is injured or dies in a crash. The pet coverage comes after Progressive Insurance announced last week that it would begin offering similar coverage for customers' dogs or cats at no additional premium.
Progressive does not now write private passenger auto in Massachusetts but it is rumored to be one of the carriers contemplating entry.
Some changes in these filings are likely before they become final. Carriers have until Nov. 27 to check their competitors' filings and amend their own. Commissioner Nonnie Burnes can also seek changes in any filings she finds unfair or not in compliance with her managed care regulations.
The rates are scheduled to go into effect April 1, 2008 and must be offered for at least 30 days. After that, any insurer can file amended rates whenever it wants.
New carriers looking to enter the market next spring have until Feb. 15, 2008 to file rates. Thus far, only one new carrier� Peerless, a unit of Liberty Mutual� has announced it will enter the market.
Mancini said his group, MAIA, will do some research and then let agents know what commissions the filings include for independent agents, who currently control nearly 95% of the market. The companies writing under-1% of the market filed for an average 13% commission.
In addition, rates for the approximately 4% of drivers insured in the state's high risk pool would go up 9.3% on average, according to a previous industry filing with the state.
Find this article here.
Under state rules, no rates for any individual driver can go up more than 10%.
Indeeed, most drivers should see savings next year. According to rate filings submitted to the state by insurers on Nov. 19, from 70% to 80% of all drivers should see rate decreases beginning in April 2008 when the new managed competition system goes into effect. For the rest, rate hikes up to 10% are possible.
The average rate decrease across all 19 insurers for all drivers statewide is about 7.7% but some drivers could see bigger rate reductions, as much as 20%, 30% and 35%.
Not only should the majority of drivers enjoy lower rates in 2008, but many could also get increased benefits while paying less.
Fourth-largest writer Liberty Mutual said its best customers could enjoy up to a 35% reduction, while the top writer Commerce and ninth largest Hanover said they will cut rates by as much as 30% for their best risks.
Travelers of Massachusetts (Premier) says approximately 75% of its customers will save money, with more than a third saving greater than 10% and some customers 20% or more.
At MetLife Auto & Home, about 74% are getting decreases, with the best risks saving up to 20% or more. Rates will go up 5% or less for about 19% while 4% of MetLife accounts will see increases over 5%.
Encompass, which insures about 2.5% of the market, says not only will nearly one-quarter of its customers receive decreases better than 10%, but also not a single current customer will see any increase.
Average statewide rate reductions filed by the top 10 carriers (with their market share) are:
Company Average Decrease
Commerce (31.6% share) 8.1%
Safety (11.2%) 6.9%
Arbella Mutual (9.3%) 6.2%
Liberty Mutual (7.9%) 10.7%
MetLife Auto & Home (6.9%) 5%
Premier /Travelers (6.6%) 6.0%
Plymouth Rock (5.7%) 4.0%
Amica Mutual (3.8%) 7.9%
Hanover (3.6%) 7.5%
USAA (2.6%) 15%
Companies writing under 1% of the market previously filed for an average 2.5% rate reduction. These include Norfolk & Dedham Group, Allianz Insurance Group, State Farm and American National Financial Group. Another in this group, Electric Insurance Group, submitted its own filing for an average 5% decrease and savings of up to 30% for some drivers.
Frank Mancini, president and CEO of the Massachusetts Association of Insurance Agents, said the first day of rate filings represents "good start" for the new system and he was pleased to see the state's independent agency companies being competitive in their offerings.
But Mancini stressed that the statewide average rate decrease is not the entire story. According to Mancini, customers and their agents will "need to look at more than rates" to determine the best deal.
Indeed, carriers signaled their desire to keep their current customers and compete for the best new business with more than just rate cuts. They are proposing deep discounts, coverages add-ons, additional services and even disappearing deductibles - features they have been making available in other states for years.
"New product features and new discounts - this is what competition brings to drivers," said James MacPhee, Liberty Mutual senior vice president and general manager for New England. "Accident forgiveness? Not in Massachusetts before managed competition. Under the old rate-setting system, consumers did not see companies enhancing their products or providing new discounts."
According to Vincent Nieroda, president of The Hanover's Massachusetts personal lines group, this is just the beginning. "Even though competition is just getting under way and Massachusetts drivers will realize significant savings now, many more benefits will evolve over time, as new companies enter the market, new products are introduced and companies fight for market share," he said.
Which drivers companies consider their best customers and therefore eligible for the biggest savings and added benefits depends on driving record but also involves other factors including their relationship with the carrier and other insurance policies they might own.
Carriers are not permitted to utilize socioeconomic factors such as home ownership, credit scores or income in their rates or underwriting, but they are offering discounts and credits to the drivers most likely benefit if those factors were permitted.
For example, a number of insurers are offering discounts to those who also have a home, condo or tenant policy with them. Carriers are circumventing the ban on home ownership as a rating factor by offering the discount to anyone with a property insurance policy (including tenants) and not just home owners. Commerce will even extend this discount to insureds with property insured in the residual market, the FAIR Plan, as well as with its own company.
Most insurers are also giving discounts to those insuring more than one car.
Insurers will be looking closely at driving records. Hanover Insurance is proposing to cut the state's six year surcharge period for accidents and convictions to three years for its customers, while Safety and MetLife Auto & Home want to recognize excellent drivers based on their merit ratings.
Several companies, including Encompass, Hanover and Liberty Mutual, are proposing accident forgiveness.
Those who pass a driver's education course stand to benefit, too, under several insurers' plans.
Loyal customers who have been with them for years (Safety, Amica, Commerce); those with low mileage (Electric, Liberty Mutual); even households with students who earn good grades (Amica, Travelers of Mass., MetLife Auto & Home) are also eligible for breaks from some carriers.
Policyholders who buy a policy from Encompass at least seven days before their current policy expires can get a break from that carrier.
Travelers of Mass. (Premier) will save owners of hybrid cars some green.
In addition to dangling discounts and credits in front of customers, companies say they will compete by offering additional coverages. These include disappearing deductibles (Hanover, Safety, Amica); new car replacement coverage (Commerce, Safety, Amica, Liberty Mutual, Hanover, MetLife Auto & Home); auto loan/lease gap coverage (Hanover, Safety, Amica, Encompass) and enhanced towing and substitute transportation.
MetLife Auto & Home is throwing in identify theft resolution protection for free.
Market leader Commerce, which will continue its popular program of discounts to members of the American Automobile Association, wants to enhance that package by also offering these AAA members coverage for laptops and cell phones and coverage if their pet is injured or dies in a crash. The pet coverage comes after Progressive Insurance announced last week that it would begin offering similar coverage for customers' dogs or cats at no additional premium.
Progressive does not now write private passenger auto in Massachusetts but it is rumored to be one of the carriers contemplating entry.
Some changes in these filings are likely before they become final. Carriers have until Nov. 27 to check their competitors' filings and amend their own. Commissioner Nonnie Burnes can also seek changes in any filings she finds unfair or not in compliance with her managed care regulations.
The rates are scheduled to go into effect April 1, 2008 and must be offered for at least 30 days. After that, any insurer can file amended rates whenever it wants.
New carriers looking to enter the market next spring have until Feb. 15, 2008 to file rates. Thus far, only one new carrier� Peerless, a unit of Liberty Mutual� has announced it will enter the market.
Mancini said his group, MAIA, will do some research and then let agents know what commissions the filings include for independent agents, who currently control nearly 95% of the market. The companies writing under-1% of the market filed for an average 13% commission.
In addition, rates for the approximately 4% of drivers insured in the state's high risk pool would go up 9.3% on average, according to a previous industry filing with the state.
Find this article here.
Under state rules, no rates for any individual driver can go up more than 10%.
Wednesday, November 21, 2007
Drivers advised to compare with care
Under competition, rates to vary widely in car insurance policies
By Bruce Mohl Globe Staff / November 21, 2007
Read the article here
By Bruce Mohl Globe Staff / November 21, 2007
Read the article here
Baystate Steers toward competition
By Boston Herald editorial staff Wednesday, November 21, 2007
Critics are trying to spin this week’s auto insurance rate filings as a disappointment - “only” an average 8 percent drop in rates next year, can you imagine! - but the criticism is off the mark.
For starters, thousands of Massachusetts motorists will be able to shop around for better deals thanks to new discounts companies plan to offer. Depending on the insurer, everything from a student’s good grades to sticking with the same company might buy a few bucks off the premium.
And while Monday’s filings came only from the 19 carriers already writing policies here, new carriers have until Feb. 15 to qualify to enter the market for next year. You can bet the out-of-town players will be studying every detail of the filings to prepare.
Meanwhile, the vast majority of Massachusetts motorists will see their rates go down. Filings from insurers with the largest market share indicate average rate cuts between 6.2 percent (Arbella) and 10.7 percent (Liberty Mutual).
USAA made the boldest move, announcing average cuts of 15.5 percent, while Encompass Insurance is already rethinking its mousy proposal to reduce rates by only 3.4 percent (companies have a week to amend their filings).
In a word, it’s called competition. True, some drivers won’t see any reduction in rates. Others (inexperienced drivers or those with checkered driving records) might see their rates go up slightly (although none will see a rate increase of more than 10 percent).
Some policy-makers remain stubbornly opposed to the market approach and place their confidence instead in the protectionist policies that drove dozens of insurers from the state.
But this modest effort at “managed competition” has resulted in modest improvements - pretty much the way Insurance Commissioner Nonnie Burnes designed it.
Critics are trying to spin this week’s auto insurance rate filings as a disappointment - “only” an average 8 percent drop in rates next year, can you imagine! - but the criticism is off the mark.
For starters, thousands of Massachusetts motorists will be able to shop around for better deals thanks to new discounts companies plan to offer. Depending on the insurer, everything from a student’s good grades to sticking with the same company might buy a few bucks off the premium.
And while Monday’s filings came only from the 19 carriers already writing policies here, new carriers have until Feb. 15 to qualify to enter the market for next year. You can bet the out-of-town players will be studying every detail of the filings to prepare.
Meanwhile, the vast majority of Massachusetts motorists will see their rates go down. Filings from insurers with the largest market share indicate average rate cuts between 6.2 percent (Arbella) and 10.7 percent (Liberty Mutual).
USAA made the boldest move, announcing average cuts of 15.5 percent, while Encompass Insurance is already rethinking its mousy proposal to reduce rates by only 3.4 percent (companies have a week to amend their filings).
In a word, it’s called competition. True, some drivers won’t see any reduction in rates. Others (inexperienced drivers or those with checkered driving records) might see their rates go up slightly (although none will see a rate increase of more than 10 percent).
Some policy-makers remain stubbornly opposed to the market approach and place their confidence instead in the protectionist policies that drove dozens of insurers from the state.
But this modest effort at “managed competition” has resulted in modest improvements - pretty much the way Insurance Commissioner Nonnie Burnes designed it.
New auto rates itemized
By Jack Dew, Berkshire Eagle Staff
Article Last Updated: 11/21/2007 02:59:26 AM EST
Drivers gunning their engines for auto insurance savings might want to shift into park.
The rates proposed by the state's 19 auto insurance companies won't take effect until April — anyone renewing a plan between now and then will do so under the old system — and some drivers could see their premiums increase by up to 10 percent, leading critics of competitive rate setting to say that their fears are coming true.
The average statewide plan will decrease by 7.7 percent, but good drivers could see reductions of as much as 25 or even 35 percent, with some companies offering aggressive discounts to capture the lowest-risk customers. Drivers with bad records, on the other hand, could see premiums rise by up to 9.9 percent.
Massachusetts is allowing auto insurers to set their own rates for the first time since the 1970s, ending years of state-set premiums. Under the rules set by Gov. Deval L. Patrick's administration, there are some restrictions: No driver can see his or her premiums increase by more than 10 percent, and companies are forbidden to use a driver's credit score to assess risk.
State Insurance Commissioner Nonnie Burnes released four sample policies yesterday that showed the maximum possible discount for four customers — a single driver with a good record, a family of three with one speeding ticket and so forth. All could find plans offering double-digit discounts, some as high as 36 percent over their current bills.
Although Burnes pointed to those rates as proof that good drivers from all areas will benefit under competition, the samples she released included only perfect or near-perfect drivers; she did not release samples that showed increasing rates for bad drivers.
The plans showed a broad range of potential prices: The same driver could be offered a 6 percent increase from one company and a 25 percent decrease from another. Burnes said drivers will have to keep their eyes open to make sure they get the best deal.
"It will be worth people's while to look around for the good deals," Burnes said. "They should be motivated and shop around. There are additional provisions that at least some customers might find interesting."
Most insurance experts suggest that consumers wait until the smoke clears and then explore the new marketplace.
"I would advise clients to do nothing because (the new rates) won't start until April 2008, and those polices won't be issued until the middle or end of February," said Edward Burniske of Reynolds, Barnes & Hebb Inc. insurance company in Pittsfield. "Hopefully, your agent will price them out for you, because a lot of the companies are going to give discounts for customers with homeowners' policies or two cars on the same policy."
James T. Harrington, executive director of the Massachusetts Insurance Federation, said that 64 percent of state drivers have good enough records to qualify for cheaper rates. Because 80 percent of all drivers already use insurance brokers, he suggested that they continue to do so, but go to two or three to find the best deals.
But critics of competition renewed their charge yesterday that the state is creating a system of insurance haves and have nots. Companies will cherry-pick the least risky drivers in the safest areas.
Andrea F. Nuciforo Jr., former state senator from Pittsfield, was a leading opponent of competitive pricing when he oversaw the insurance industry as chairman of the Legislature's Financial Services Committee. Now the Middle Berkshire register of deeds, he remains a critic of ending state control.
"In effect, what has happened is that a playing field that was entirely level for drivers is less level today," he said, "and it is less favorable for some of the most vulnerable drivers."
Last year, under the state-controlled system, drivers received an 11.7 percent premium reduction, and many industry observers expected rates to decline another 10 percent if the state set prices again this year. Nuciforo said he was not impressed by the 7.7 percent average drop in pricing.
"There will be big savings for a few drivers, pretty good savings for other people that are not unlike what they would have had (if the state set the prices), and there are going to be some pretty dramatic spikes for others," he said.
And it will be harder for drivers to tell what they are buying, he added, as insurers can now introduce new products that may be confusing or simply incomprehensible to the lay person.
And the rates still could change. The companies have a chance to amend their prices next week; although many are expected to either keep their proposals the same or to lower them to compete with other providers, they also could increase them.
Eagle Boston Bureau reporter Hillary Chabot contributed to this story.
At a glance ...
Article Last Updated: 11/21/2007 02:59:26 AM EST
Drivers gunning their engines for auto insurance savings might want to shift into park.
The rates proposed by the state's 19 auto insurance companies won't take effect until April — anyone renewing a plan between now and then will do so under the old system — and some drivers could see their premiums increase by up to 10 percent, leading critics of competitive rate setting to say that their fears are coming true.
The average statewide plan will decrease by 7.7 percent, but good drivers could see reductions of as much as 25 or even 35 percent, with some companies offering aggressive discounts to capture the lowest-risk customers. Drivers with bad records, on the other hand, could see premiums rise by up to 9.9 percent.
Massachusetts is allowing auto insurers to set their own rates for the first time since the 1970s, ending years of state-set premiums. Under the rules set by Gov. Deval L. Patrick's administration, there are some restrictions: No driver can see his or her premiums increase by more than 10 percent, and companies are forbidden to use a driver's credit score to assess risk.
State Insurance Commissioner Nonnie Burnes released four sample policies yesterday that showed the maximum possible discount for four customers — a single driver with a good record, a family of three with one speeding ticket and so forth. All could find plans offering double-digit discounts, some as high as 36 percent over their current bills.
Although Burnes pointed to those rates as proof that good drivers from all areas will benefit under competition, the samples she released included only perfect or near-perfect drivers; she did not release samples that showed increasing rates for bad drivers.
The plans showed a broad range of potential prices: The same driver could be offered a 6 percent increase from one company and a 25 percent decrease from another. Burnes said drivers will have to keep their eyes open to make sure they get the best deal.
"It will be worth people's while to look around for the good deals," Burnes said. "They should be motivated and shop around. There are additional provisions that at least some customers might find interesting."
Most insurance experts suggest that consumers wait until the smoke clears and then explore the new marketplace.
"I would advise clients to do nothing because (the new rates) won't start until April 2008, and those polices won't be issued until the middle or end of February," said Edward Burniske of Reynolds, Barnes & Hebb Inc. insurance company in Pittsfield. "Hopefully, your agent will price them out for you, because a lot of the companies are going to give discounts for customers with homeowners' policies or two cars on the same policy."
James T. Harrington, executive director of the Massachusetts Insurance Federation, said that 64 percent of state drivers have good enough records to qualify for cheaper rates. Because 80 percent of all drivers already use insurance brokers, he suggested that they continue to do so, but go to two or three to find the best deals.
But critics of competition renewed their charge yesterday that the state is creating a system of insurance haves and have nots. Companies will cherry-pick the least risky drivers in the safest areas.
Andrea F. Nuciforo Jr., former state senator from Pittsfield, was a leading opponent of competitive pricing when he oversaw the insurance industry as chairman of the Legislature's Financial Services Committee. Now the Middle Berkshire register of deeds, he remains a critic of ending state control.
"In effect, what has happened is that a playing field that was entirely level for drivers is less level today," he said, "and it is less favorable for some of the most vulnerable drivers."
Last year, under the state-controlled system, drivers received an 11.7 percent premium reduction, and many industry observers expected rates to decline another 10 percent if the state set prices again this year. Nuciforo said he was not impressed by the 7.7 percent average drop in pricing.
"There will be big savings for a few drivers, pretty good savings for other people that are not unlike what they would have had (if the state set the prices), and there are going to be some pretty dramatic spikes for others," he said.
And it will be harder for drivers to tell what they are buying, he added, as insurers can now introduce new products that may be confusing or simply incomprehensible to the lay person.
And the rates still could change. The companies have a chance to amend their prices next week; although many are expected to either keep their proposals the same or to lower them to compete with other providers, they also could increase them.
Eagle Boston Bureau reporter Hillary Chabot contributed to this story.
At a glance ...
- New rates were introduced Monday, as Massachusetts is allowing auto insurers to set their own rates for the first time since the 1970s, ending years of state-set premiums.
- The average statewide plan will decrease by 7.7 percent. Good drivers could see reductions of as much as 25 or even 35 percent, but bad drivers could see premiums increase up to 9.9 percent.
- Consumers are advised to shop around for the best deal; one company could increase the premium for a driver, while another company could offer a decrease of as much as 25 percent.
Tuesday, November 20, 2007
Safety Insurance : Highlights of Auto Rate Filing
Letter to agents:
Safety Insurance, an A.M. Best "A" rated company, is please to announce that we have submitted a Private Passenger Automobile rate filing that offers your customerss up to a 25% rate decrease beginnning April 1, 2008.
Approximately 85% of all drivers will see a rate decrease. Of those drivers experiencing rate increases, less than 1% could see the maximum allowable increase of 10%. Safety's rate filing will provide your agency with an extremely competitive private passenger automobile product that includes the following:
Safety Insurance, an A.M. Best "A" rated company, is please to announce that we have submitted a Private Passenger Automobile rate filing that offers your customerss up to a 25% rate decrease beginnning April 1, 2008.
Approximately 85% of all drivers will see a rate decrease. Of those drivers experiencing rate increases, less than 1% could see the maximum allowable increase of 10%. Safety's rate filing will provide your agency with an extremely competitive private passenger automobile product that includes the following:
- Account Discount of 10% for automobile policy holders who have another policy with us for any other line of business written by Safety
- Multi-Car discount of 10%
- Loyalty/Renewal Discount of up to 5% for policyholders who maintain continuous coverage with Safety.
- Merit Rating Plan enhancements: Increase SDIP step 99 credit from 17% to 25% and increase SDIP step 98 credit from 7% to 15%
- The "Safety Shield", a broad coverage enhancement endorsement. Some of Safety Shield's features include a disappearing collision deductible, guaranteed replacement cost, extended substitute transportation and air bag mechanical failure.
- Auto Loan/Lease Gap coverage endorsement
We will also offer on April 1, 2008, a combined billing option for your policyholders that wish to have all their Safety Insurance policies combined onto a single bill.
In addition, we will be filing enhancements to our other products to give our agents a superior offering of auto, home and business insurance products for your customers. And of course, Safety is dedicated to ensure that our agents and their customers receive the highest standard of service.
Commerce Letter to Agents
Date: November 20, 2007
Re: Personal Automobile Rate Decrease
Yesterday, Commerce filed proposed rate decreases and additional coverages for personal automobile insurance policies. The new rates and coverages are expected to take effect April 1, 2008, if approved by the Commissioner of Insurance.
As we prepared our filing, we maintained the following objectives:
• Deliver a competitive product and price to agents that would position Commerce aggressively in the marketplace
• Strike a balance between protecting renewal business and creating a compelling new business rate
• Create a rating structure that would be easy for agents to use and understand
• Construct a rating methodology that more closely aligns loss costs with risk profile
• Maintain our industry leading compensation programs Based on these objectives, we are pleased to introduce a filing where we anticipate that approximately 75% of your insureds will experience a decrease in premium. In fact, nearly 35% of your customers will see decreases in excess of 10%. As you might have anticipated, experienced operators, and those with SDIP points of 99 or 98, will reap the most cost savings.
We have also proposed several policyholder discounts which offer your customers additional benefits, including:
• Enhanced pricing for experienced drivers
• A sliding scale of “Loyalty Credits” of up to 4% for existing customers who have maintained continuous coverage for three or more consecutive years
• A 5% Account Discount when Commerce, or the FAIR Plan, writes a property policy for the named insured
Re: Personal Automobile Rate Decrease
Yesterday, Commerce filed proposed rate decreases and additional coverages for personal automobile insurance policies. The new rates and coverages are expected to take effect April 1, 2008, if approved by the Commissioner of Insurance.
As we prepared our filing, we maintained the following objectives:
• Deliver a competitive product and price to agents that would position Commerce aggressively in the marketplace
• Strike a balance between protecting renewal business and creating a compelling new business rate
• Create a rating structure that would be easy for agents to use and understand
• Construct a rating methodology that more closely aligns loss costs with risk profile
• Maintain our industry leading compensation programs Based on these objectives, we are pleased to introduce a filing where we anticipate that approximately 75% of your insureds will experience a decrease in premium. In fact, nearly 35% of your customers will see decreases in excess of 10%. As you might have anticipated, experienced operators, and those with SDIP points of 99 or 98, will reap the most cost savings.
We have also proposed several policyholder discounts which offer your customers additional benefits, including:
• Enhanced pricing for experienced drivers
• A sliding scale of “Loyalty Credits” of up to 4% for existing customers who have maintained continuous coverage for three or more consecutive years
• A 5% Account Discount when Commerce, or the FAIR Plan, writes a property policy for the named insured
Cut in auto rates to average 7.7%
Drop is smaller than in no-competition system (Boston Globe)
By Bruce Mohl
Globe Staff / November 20, 2007
By Bruce Mohl
Globe Staff / November 20, 2007
Most drivers to see rates drop
Insurers offering ‘substantial’ cuts
By Steve LeBlanc THE ASSOCIATED PRESS
BOSTON— Most drivers can look forward to a drop in their car insurance rates under the state’s new competitive system, but insurance officials couldn’t say how big the average decrease would be statewide. Under the old system, in which the state set one rate for all insurers, rates fell by 11.7 percent last year. Consumer advocates have suggested that with the old system car owners could have looked at another cut of at least 10 percent. Under the new, competitive system, most insurers are offering average rate cuts of less than 10 percent.
Insurance Commissioner Nonnie S. Burnes said based on filings submitted by the state’s 19 insurers yesterday, at least 1.2 million motorists will see a 10 percent cut or more. There are about 4 million drivers in Massachusetts. “The very good news is that every company filed for an average rate decrease,” Burnes said. “We are seeing what appear to be very substantial deductions for good drivers.”
Until now, Massachusetts was the only state where regulators, not the market, set car insurance rates.
The Patrick administration pushed to open the market, allowing companies to submit their proposed insurance products and rates to regulators, who will review them, before offering them to the public.
The goal was designed in part to encourage more insurers to return to Massachusetts, but Burnes said the 19 insurers that submitted filings yesterday were already doing business in the state under the old system.
The state’s largest insurer, Webster-based Commerce Insurance, said in a statement that more than two-thirds of its policyholders will pay less for automobile insurance, and some may be in line for decreases of as much as 30 percent when compared to 2007 rates. Commerce, which controls 31.5 percent of the market, said it would continue to offer discounts to members of AAA and provide discounts for customers who have had auto coverage with Commerce for three or more consecutive years. Multipolicy discounts will also be provided, the company said.
Rules bar insurers from considering income, marital status, education, occupation, home ownership and credit scores when setting their rates. Insurers are limited to considering a motorist’s experience and driving record as primary factors in setting rates.
But consumer advocates said insurers may use other information to reach the same conclusions, for example offering discounts to potential customers who have homeowners insurance as a way to find out if they own property. As a result, it’s possible that rates will vary widely even among drivers with good records, according to Stephen D’Amato of the Center for Insurance Research.
“There will be a lot of people who will think they are going to get deep decreases because they consider themselves the best drivers, who are going to be disappointed,” he said.
But Burnes said she’s seen the opposite. She said at least one company is offering discounts to people with renters insurance who may not own a home. She said other companies are offering discounts for drivers who use public transportation or drive fewer miles, which could benefit urban drivers.
“What we are seeing is a wide range of rates and some very clever products that are both designed to keep their customers and to provide benefits to allow people to control their own rates,” she said.
Burnes didn’t give an average statewide cut based on the filings. She also said there was no guarantee that the state would have cut rates by 10 percent if it had kept the old system.
“It’s become a bit of an urban myth,” she said.
Mr. D’Amato said if the system had not been changed, overall rates in 2008 would have dropped between 10 percent and 15 percent and all drivers would have received a rate decrease. Insurers were quick to tout the lower rates they say they are able to offer most of their customers because of the changes in the system.
Worcester-based Travelers of Massachusetts, the state’s No. 6 insurer, said 75 percent of its 300,000 policies will be in line for a rate decrease. More than 33 percent of its customers will see savings greater than 10 percent, with some saving 20 percent or more.
Susan K. Scott, senior vice president and general counsel for Travelers, said about 25 percent of its drivers will see rate increases. On average, however, customers can expect savings of 6 percent, the company said.
Travelers will offer some new discounts that lower a person’s projected rate increase, including multiple policy discounts, hybrid car discounts or being a high school or college student with good grades.
“For the first time in a very long time, we have a significant appetite for growing our book of business,” said Ms. Scott.
Travelers insures about 7 percent of the state’s 4 million drivers.
Amica Mutual Insurance Co., the eighth-largest automobile insurer, said it would cut rates an average of 7.9 percent under the new guidelines. Amica, with 3.6 percent of the market, said 80 percent of its 100,000 policies will realize a rate decrease. The remainder will be in line for a rate increase, but it should not be substantial and will be well less than the maximum 10 percent permitted by Ms. Burnes.
USAA, which provides insurance products to active-duty U.S. military members and their families, said 95 percent of its 60,000 policies will be in line for a rate decrease, with the average rate decrease being 15 percent. No one will have a rate hike, said USAA spokesman David Snowden. USAA has 2.1 percent of the state’s market.
Yesterday’s filings are being closely watched on Beacon Hill, where some urban lawmakers are pushing a bill to significantly change the administration’s final set of rules. Sen. Dianne Wilkerson, D-Boston, and Rep. Antonio F.D. Cabral, D-New Bedford, say those rules create loopholes, such as considering membership in a professional organization as a proxy for occupation, which insurers can use to set higher rates for low-income and poor people.
Telegram & Gazette business reporter Bob Kievra contributed to this story.
By Steve LeBlanc THE ASSOCIATED PRESS
BOSTON— Most drivers can look forward to a drop in their car insurance rates under the state’s new competitive system, but insurance officials couldn’t say how big the average decrease would be statewide. Under the old system, in which the state set one rate for all insurers, rates fell by 11.7 percent last year. Consumer advocates have suggested that with the old system car owners could have looked at another cut of at least 10 percent. Under the new, competitive system, most insurers are offering average rate cuts of less than 10 percent.
Insurance Commissioner Nonnie S. Burnes said based on filings submitted by the state’s 19 insurers yesterday, at least 1.2 million motorists will see a 10 percent cut or more. There are about 4 million drivers in Massachusetts. “The very good news is that every company filed for an average rate decrease,” Burnes said. “We are seeing what appear to be very substantial deductions for good drivers.”
Until now, Massachusetts was the only state where regulators, not the market, set car insurance rates.
The Patrick administration pushed to open the market, allowing companies to submit their proposed insurance products and rates to regulators, who will review them, before offering them to the public.
The goal was designed in part to encourage more insurers to return to Massachusetts, but Burnes said the 19 insurers that submitted filings yesterday were already doing business in the state under the old system.
The state’s largest insurer, Webster-based Commerce Insurance, said in a statement that more than two-thirds of its policyholders will pay less for automobile insurance, and some may be in line for decreases of as much as 30 percent when compared to 2007 rates. Commerce, which controls 31.5 percent of the market, said it would continue to offer discounts to members of AAA and provide discounts for customers who have had auto coverage with Commerce for three or more consecutive years. Multipolicy discounts will also be provided, the company said.
Rules bar insurers from considering income, marital status, education, occupation, home ownership and credit scores when setting their rates. Insurers are limited to considering a motorist’s experience and driving record as primary factors in setting rates.
But consumer advocates said insurers may use other information to reach the same conclusions, for example offering discounts to potential customers who have homeowners insurance as a way to find out if they own property. As a result, it’s possible that rates will vary widely even among drivers with good records, according to Stephen D’Amato of the Center for Insurance Research.
“There will be a lot of people who will think they are going to get deep decreases because they consider themselves the best drivers, who are going to be disappointed,” he said.
But Burnes said she’s seen the opposite. She said at least one company is offering discounts to people with renters insurance who may not own a home. She said other companies are offering discounts for drivers who use public transportation or drive fewer miles, which could benefit urban drivers.
“What we are seeing is a wide range of rates and some very clever products that are both designed to keep their customers and to provide benefits to allow people to control their own rates,” she said.
Burnes didn’t give an average statewide cut based on the filings. She also said there was no guarantee that the state would have cut rates by 10 percent if it had kept the old system.
“It’s become a bit of an urban myth,” she said.
Mr. D’Amato said if the system had not been changed, overall rates in 2008 would have dropped between 10 percent and 15 percent and all drivers would have received a rate decrease. Insurers were quick to tout the lower rates they say they are able to offer most of their customers because of the changes in the system.
Worcester-based Travelers of Massachusetts, the state’s No. 6 insurer, said 75 percent of its 300,000 policies will be in line for a rate decrease. More than 33 percent of its customers will see savings greater than 10 percent, with some saving 20 percent or more.
Susan K. Scott, senior vice president and general counsel for Travelers, said about 25 percent of its drivers will see rate increases. On average, however, customers can expect savings of 6 percent, the company said.
Travelers will offer some new discounts that lower a person’s projected rate increase, including multiple policy discounts, hybrid car discounts or being a high school or college student with good grades.
“For the first time in a very long time, we have a significant appetite for growing our book of business,” said Ms. Scott.
Travelers insures about 7 percent of the state’s 4 million drivers.
Amica Mutual Insurance Co., the eighth-largest automobile insurer, said it would cut rates an average of 7.9 percent under the new guidelines. Amica, with 3.6 percent of the market, said 80 percent of its 100,000 policies will realize a rate decrease. The remainder will be in line for a rate increase, but it should not be substantial and will be well less than the maximum 10 percent permitted by Ms. Burnes.
USAA, which provides insurance products to active-duty U.S. military members and their families, said 95 percent of its 60,000 policies will be in line for a rate decrease, with the average rate decrease being 15 percent. No one will have a rate hike, said USAA spokesman David Snowden. USAA has 2.1 percent of the state’s market.
Yesterday’s filings are being closely watched on Beacon Hill, where some urban lawmakers are pushing a bill to significantly change the administration’s final set of rules. Sen. Dianne Wilkerson, D-Boston, and Rep. Antonio F.D. Cabral, D-New Bedford, say those rules create loopholes, such as considering membership in a professional organization as a proxy for occupation, which insurers can use to set higher rates for low-income and poor people.
Telegram & Gazette business reporter Bob Kievra contributed to this story.
Monday, November 19, 2007
Plymouth Rock's Letter to Greg
I received the following letter from the President of Plymouth Rock Assurance Corporation re: today's filing with the Division of Insurance. - Greg
Dear Greg,
Today, Plymouth Rock filed its initial rates and product enhancements to be effective with the April 1, 2008 start of managed competition. I am pleased to announce that the effective premium reduction underlying our filing is about 6%. Our pricing strategy aims to minimize market disruption, retain existing Plymouth Rock customers and attract new business. 90% of existing Plymouth Rock customers who have been insured by us for three years will see their rates go down next year, while no such insured will see an increase greater than 5%. Policyholders can save 20% or more and over one third of our policyholders will see their rates go down by 10% or more.
Plymouth Rock will introduce several product enhancements which our policyholders will find attractive. Our new OEM coverage endorsement provides, at no additional cost, Original Equipment Manufacturer parts replacement when the damaged part of a vehicle with less than 20,000 miles cannot be repaired. We will also offer a Replacement Cost endorsement for new vehicles that pays the difference between the Actual Cash Value of the auto and the cost of a new vehicle in the event of a total loss. This free endorsement will cover vehicles less than twelve months old and with less than 15,000 miles. Coverage may also be extended beyond the mileage limitation for an additional cost. When a customer buys a new car, you can assure them that Plymouth Rock is a great choice.
Two additional endorsements merit special attention. Our Deductible Dollars endorsement reduces the Collision deductible each year the policy does not have a claim. Loss-free policies will earn a deductible credit of $100 each year, to a maximum of $500 (or the total deductible if less than $500). Customers with an existing Plymouth Rock policy for at least three years and no physical damage losses will automatically have their deductible reduced by $100 on renewal as an additional incentive to remain with Plymouth Rock. For our long-standing policyholders, we will also offer, for no additional cost, Accident Forgiveness on policies in effect with Plymouth Rock more than four years in which the listed drivers are SDIP step 98 or 99. This means a surcharge will not be applied and the SDIP credit will not be lost due to one surchargeable, at-fault accident that may occur to a listed operator and vehicle. Policyholders who don’t automatically qualify for the endorsement may purchase this valuable protection for a modest premium.
In addition to our overall price reduction, we are introducing three additional discounts targeted at less experienced operators. The first is an Advanced Driver Training discount for drivers with less than six years experience who participate in a certified advanced driver training program. This discount is available for up to three years and applies to Bodily Injury, Personal Injury Protection, Property Damage and Collision coverages. Second is a Good Student discount for inexperienced operators enrolled full-time in high school or an accredited college or university. To qualify for this credit, the student must have no more than three SDIP points and maintain at least a “B” or equivalent grade average. The third discount for Students Away at School offers a discount for inexperienced operators residing at an accredited educational institution more than 100 miles from the garaging location who do not have regular access to the covered vehicle while at school.
Just as we believe we offer our customers more than just insurance, we think that competition is about more than just price. As we have done consistently for nearly twenty-five years, we will continue to lead with the strength of our outstanding Door to Door Valet Claims Servicesm and our unique True Service® Pledge. In the coming months we will be working with our agents on sales techniques that have worked well for us in New Jersey, where our company is one of only a few agency companies that are actually bigger than they were before the new national competitors entered that market. In addition, we will be adding new value added programs and providing you with new sales materials that demonstrate the value of being insured by Plymouth Rock Assurance.
The Division of Insurance will make available all company filings tomorrow. Companies may then make amendments to their initial filings by next Tuesday, November 27th. We will carefully analyze what our competitors are doing, and if necessary, may make a revised filing. If we do make additional changes to our rates or product, we will certainly let you know.
We will continue to monitor the market closely and will provide you with a competitive, innovative and service-oriented product that will enable you to grow your book of business with us. While the road ahead is filled with some degree of uncertainty, I am confident that by continuing to work together we can thrive in this new and fluid market. I would love to hear any comments or suggestions you may have.
Thank you very much for your continued support and best wishes to you, your staff and your families for a Happy Thanksgiving.
Sincerely,
Hal Belodoff
Dear Greg,
Today, Plymouth Rock filed its initial rates and product enhancements to be effective with the April 1, 2008 start of managed competition. I am pleased to announce that the effective premium reduction underlying our filing is about 6%. Our pricing strategy aims to minimize market disruption, retain existing Plymouth Rock customers and attract new business. 90% of existing Plymouth Rock customers who have been insured by us for three years will see their rates go down next year, while no such insured will see an increase greater than 5%. Policyholders can save 20% or more and over one third of our policyholders will see their rates go down by 10% or more.
Plymouth Rock will introduce several product enhancements which our policyholders will find attractive. Our new OEM coverage endorsement provides, at no additional cost, Original Equipment Manufacturer parts replacement when the damaged part of a vehicle with less than 20,000 miles cannot be repaired. We will also offer a Replacement Cost endorsement for new vehicles that pays the difference between the Actual Cash Value of the auto and the cost of a new vehicle in the event of a total loss. This free endorsement will cover vehicles less than twelve months old and with less than 15,000 miles. Coverage may also be extended beyond the mileage limitation for an additional cost. When a customer buys a new car, you can assure them that Plymouth Rock is a great choice.
Two additional endorsements merit special attention. Our Deductible Dollars endorsement reduces the Collision deductible each year the policy does not have a claim. Loss-free policies will earn a deductible credit of $100 each year, to a maximum of $500 (or the total deductible if less than $500). Customers with an existing Plymouth Rock policy for at least three years and no physical damage losses will automatically have their deductible reduced by $100 on renewal as an additional incentive to remain with Plymouth Rock. For our long-standing policyholders, we will also offer, for no additional cost, Accident Forgiveness on policies in effect with Plymouth Rock more than four years in which the listed drivers are SDIP step 98 or 99. This means a surcharge will not be applied and the SDIP credit will not be lost due to one surchargeable, at-fault accident that may occur to a listed operator and vehicle. Policyholders who don’t automatically qualify for the endorsement may purchase this valuable protection for a modest premium.
In addition to our overall price reduction, we are introducing three additional discounts targeted at less experienced operators. The first is an Advanced Driver Training discount for drivers with less than six years experience who participate in a certified advanced driver training program. This discount is available for up to three years and applies to Bodily Injury, Personal Injury Protection, Property Damage and Collision coverages. Second is a Good Student discount for inexperienced operators enrolled full-time in high school or an accredited college or university. To qualify for this credit, the student must have no more than three SDIP points and maintain at least a “B” or equivalent grade average. The third discount for Students Away at School offers a discount for inexperienced operators residing at an accredited educational institution more than 100 miles from the garaging location who do not have regular access to the covered vehicle while at school.
Just as we believe we offer our customers more than just insurance, we think that competition is about more than just price. As we have done consistently for nearly twenty-five years, we will continue to lead with the strength of our outstanding Door to Door Valet Claims Servicesm and our unique True Service® Pledge. In the coming months we will be working with our agents on sales techniques that have worked well for us in New Jersey, where our company is one of only a few agency companies that are actually bigger than they were before the new national competitors entered that market. In addition, we will be adding new value added programs and providing you with new sales materials that demonstrate the value of being insured by Plymouth Rock Assurance.
The Division of Insurance will make available all company filings tomorrow. Companies may then make amendments to their initial filings by next Tuesday, November 27th. We will carefully analyze what our competitors are doing, and if necessary, may make a revised filing. If we do make additional changes to our rates or product, we will certainly let you know.
We will continue to monitor the market closely and will provide you with a competitive, innovative and service-oriented product that will enable you to grow your book of business with us. While the road ahead is filled with some degree of uncertainty, I am confident that by continuing to work together we can thrive in this new and fluid market. I would love to hear any comments or suggestions you may have.
Thank you very much for your continued support and best wishes to you, your staff and your families for a Happy Thanksgiving.
Sincerely,
Hal Belodoff
Quincy Mutual's MA Auto Filing
Quincy Mutual Group has forwarded us the the highlights of their initial filing with the Division of Insurance today.
- Overall 10% rate decrease
- Adoption of a revised Class Plan which further breaks out years of driving experience for those previously in the Class 10 category, offering a greater discount to the most experienced operators.
- While maintaining the structure of the SDIP program we will provide additional discounts for steps 99 and 98.
- The Multi Car discount will be increased to 10%.
- A “Customer Loyalty Credit” is available to selected classes of business: A 4% discount for renewal policyholders where we have had their automobile coverage for at least one year.
- A 4% credit is available to new business where we have had a homeowners policy (all forms) in force for at least one year.
- A 5% discount will apply when a rated operator has completed an approved Advanced Driver Training Course.
Insurers File Mass. Auto Rates Today; Bill to Control Rating Factors Stalled
Today is the due date for MA auto insurers to file their first round of proposed rates with the Division of Insurance for implementation on April 1, 2008. Click here for more details.
Plymouth Rock has informed us that their initial filing consists of "a competitive pricing strategy and enhancements that will complement (their) trademark service features. New products will include, but not be limited to, Replacement Cost coverage, Accident Forgiveness, and a Disappearing Deductible. (They) are also adding discounts for Good Students, Students Away at School and Advanced Driver Training. (They) will share the details of this plan with (us) as soon as it is filed. "
Plymouth Rock has also advised that there will be continuous changes as insurers develop their new plans for the managed competition program and that "it is prudent for customers to adopt a cautious, 'wait and see' approach as prices will be too volatile to solely drive the insurance buying decision."
This is an exciting time for Massachusetts as it steps in to a new era of competitive auto insurance rates. Stay tuned for more information as we get closer to April 1!
Plymouth Rock has informed us that their initial filing consists of "a competitive pricing strategy and enhancements that will complement (their) trademark service features. New products will include, but not be limited to, Replacement Cost coverage, Accident Forgiveness, and a Disappearing Deductible. (They) are also adding discounts for Good Students, Students Away at School and Advanced Driver Training. (They) will share the details of this plan with (us) as soon as it is filed. "
Plymouth Rock has also advised that there will be continuous changes as insurers develop their new plans for the managed competition program and that "it is prudent for customers to adopt a cautious, 'wait and see' approach as prices will be too volatile to solely drive the insurance buying decision."
This is an exciting time for Massachusetts as it steps in to a new era of competitive auto insurance rates. Stay tuned for more information as we get closer to April 1!
Thursday, November 15, 2007
Thanksgiving Fires
Courtesy of Servpro of Marlborough/Concord
During the holidays, fire risks and incidences increase and Thanksgiving is no exception. In fact, Thanksgiving fires are more frequent and cause more property damage than typical residential structure fires. The dollar loss per per incident increases 25% on Thanksgiving Day alone. As you may have guessed, cooking is the leading cause of residential fires. As you may have guessed, cooking is the leading cause of residential fires. In fact, 42% of Thanksgiving fires are the result of a cooking incident with unattended food being the main source of ignition. According to the U.S. Fire Administration, nearly 4,300 fires occur on Thanksgiving each year in the United State, resulting in nearly $27 million in property damage.
Turkey fryers are a growing concern regarding fire safety according to Underwriter Laboratories (UL), Inc. The U.S. Consumer Product Safety Commission (CPSC) and UL recommend the following precautionary safety measures when using turkey fryers:
Peerless Insurance Returning to Mass. Auto Under Managed Competition
Liberty Mutual Group today announced that one of its companies – Keene, N.H.-based Peerless Insurance – intends to return to the Massachusetts private passenegr auto insurance market next year after a 20-year absence.
Peerless Insurance is expected to file rates on or after February 15, 2008, and plans to begin offering auto and home insurance through independent agents in the second quarter of next year.
Peerless already sells commercial insurance in the state through about 150 independent agent locations. In 2006 the company wrote approximately $70 million in commercial insurance premiums in Massachusetts.
Peerless is the first insurer to announce plans to enter the state to write auto insurance since Massachusetts Insurance Commissioner Nonnie S. Burnes introduced managed competition. In 1988, Peerless Insurance became the first of many companies to stop issuing new and renewal policies in Massachusetts because of what it then deemed the state's malfunctioning auto insurance system.
The state currently has 19 insurers writing private passenger auto policies.
The Peerless announcement came in the same week that Liberty Mutual also announced it was boosting its Bay State direct sales force by 50 percent to handle additional auto insurance business.
"Consumers like choices when making purchase decisions," said Edmund F. Kelly, Liberty Mutual Group chairman, president and CEO. "Along with the recent increase of our direct sales force in Massachusetts, adding Peerless Insurance's distribution through independent agents underlines our commitment to providing a range of options to Massachusetts consumers."
Peerless Insurance is a member of Liberty Mutual Group's Agency Markets business unit, which consists of regional property and casualty and specialty insurance companies that distribute products and services through independent agents and brokers. Peerless currently sells personal insurance in seven states in its eight-state region.
Source: Liberty Mutual Group www.libertymutual.com
Peerless Insurance is expected to file rates on or after February 15, 2008, and plans to begin offering auto and home insurance through independent agents in the second quarter of next year.
Peerless already sells commercial insurance in the state through about 150 independent agent locations. In 2006 the company wrote approximately $70 million in commercial insurance premiums in Massachusetts.
Peerless is the first insurer to announce plans to enter the state to write auto insurance since Massachusetts Insurance Commissioner Nonnie S. Burnes introduced managed competition. In 1988, Peerless Insurance became the first of many companies to stop issuing new and renewal policies in Massachusetts because of what it then deemed the state's malfunctioning auto insurance system.
The state currently has 19 insurers writing private passenger auto policies.
The Peerless announcement came in the same week that Liberty Mutual also announced it was boosting its Bay State direct sales force by 50 percent to handle additional auto insurance business.
"Consumers like choices when making purchase decisions," said Edmund F. Kelly, Liberty Mutual Group chairman, president and CEO. "Along with the recent increase of our direct sales force in Massachusetts, adding Peerless Insurance's distribution through independent agents underlines our commitment to providing a range of options to Massachusetts consumers."
Peerless Insurance is a member of Liberty Mutual Group's Agency Markets business unit, which consists of regional property and casualty and specialty insurance companies that distribute products and services through independent agents and brokers. Peerless currently sells personal insurance in seven states in its eight-state region.
Source: Liberty Mutual Group www.libertymutual.com
Wednesday, November 14, 2007
Revised Flood Hazard Maps Released
Revised Flood Hazard Maps Released by
FEMA for Public Review
The Town of Winchester has recently been notified by the Federal Emergency Management Agency (FEMA) that revised, draft Flood Insurance Rate Maps (FIRMs) have been published for the Town of Winchester. These maps have been developed by FEMA as part of a national map-modernization initiative designed to update the nation’s flood hazard data. The maps for the Town of Winchester have been produced as part of a flood hazard re-study for the entire Middlesex County. When approved, these maps will replace the existing flood hazard maps for the Town that were published in the 1970’s. The revised maps will be used by insurance companies and federally-regulated mortgage lenders to determine which properties will be required to purchase flood insurance.
Read on for more information about flood.
See flood maps online.
FEMA for Public Review
The Town of Winchester has recently been notified by the Federal Emergency Management Agency (FEMA) that revised, draft Flood Insurance Rate Maps (FIRMs) have been published for the Town of Winchester. These maps have been developed by FEMA as part of a national map-modernization initiative designed to update the nation’s flood hazard data. The maps for the Town of Winchester have been produced as part of a flood hazard re-study for the entire Middlesex County. When approved, these maps will replace the existing flood hazard maps for the Town that were published in the 1970’s. The revised maps will be used by insurance companies and federally-regulated mortgage lenders to determine which properties will be required to purchase flood insurance.
Read on for more information about flood.
See flood maps online.
Tuesday, November 13, 2007
Medicaid cuts could cost Mass. $100m
Many low-income and disabled would lose out on services; rules may hurt universal-care push
By Alice Dembner
Globe Staff / November 13, 2007
By Alice Dembner
Globe Staff / November 13, 2007
Friday, November 9, 2007
Hanover to File New Auto Insurance Features for Approval from DOI
Note: This is just one of the many company announcements we will see from auto insurers as we move closer to having a competitive auto insurance market in MA, scheduled to lauch on April 1, 2008. Stay tuned and we will help you navigate the new landscape. Check in with us often!
-Suzanne M. Brozek, AAI
THE HANOVER GEARS UP TO OFFER POPULAR
CONNECTIONS™ AUTO PRODUCT IN MASSACHUSETTS
– Massachusetts Drivers to Benefit from New Product Innovations–
WORCESTER, Mass. (November 9, 2007)
The Hanover Insurance Group, Inc. (NYSE: THG), a leading writer of auto, home and business insurance in Massachusetts, announced today that the company is driving to the finish line with plans to offer its popular Connections™ Auto product exclusively through its valued independent agent partners in Massachusetts.
With Connections Auto, Massachusetts drivers will benefit from product innovations and competitive prices not currently available to Massachusetts drivers.
"We are very excited that the new environment now enables us to introduce our innovative Connections Auto product to drivers in Massachusetts," said Vincent Nieroda, president of The Hanover’s Massachusetts personal lines group. "This will be the first of many improvements and innovations we will deliver to our agent partners and their customers."
The innovations The Hanover will introduce include:
Diminishing deductibles—Collision damage deductibles will be reduced by $100 at each renewal, for each year a policyholder goes without a chargeable accident, up to a maximum of $500. For example, if a policyholder has a $500 collision deductible and does not have a chargeable collision for five or more years, the company will waive the deductible entirely if the policyholder is involved in an accident.
Lease/loan gap coverage—This protection covers the difference between what a policyholder owes on his or her auto loan or lease and what the vehicle is worth before it is totaled. As a result, in the event that a policyholder is involved in an accident and his or her car is a total loss, Connections Auto will cover the unpaid balance on a lease or loan—even if it is more than the value of the vehicle.
Accident forgiveness—The Hanover under certain conditions will waive the surcharge for one at‐fault accident under a driver’s policy every 36 months.
In addition to these distinctive coverages, The Hanover also will make available new and innovative coverages such as expanded rental reimbursement, which pays eligible car rental costs for an extended time if an insured’s vehicle is damaged in an accident, and new vehicle replacement cost, which pays for a new vehicle if an insured’s vehicle is involved in an accident and declared a total loss within one year of purchase.
Available in 17 other states countrywide, Connections Auto has been highly successful because of its ability to offer competitive coverages, pricing and the fast quotes that consumers have come to expect.
The Hanover will request approval of Connections Auto from the Department of Insurance on November 19 and plans to offer the product for new and renewal business effective on or after April 1.
To help ensure that customers receive the best combination of coverage and cost, Connections Auto—like all of The Hanover’s products—will be sold exclusively through a network of independent agents.
"Soon, Massachusetts drivers will be able to do what drivers across the country have been doing for years—purchase their insurance from companies that are competing aggressively for their business," said Edward Ruhl, regional vice president at The Hanover. "But, new regulations and more choice often can be confusing. That’s why we believe that the advice of an independent insurance agent will be more valuable than ever in helping customers to get the most out of their car insurance."
Connections Auto is part of The Hanover’s total account solution for personal lines insurance, which is backed by responsive claims and customer service. The company’s full suite of products also includes Connections Home, a unique approach to homeowners insurance; specialty coverage for ATVs, personal watercraft, jet skis, manufactured homes and collector cars; personal umbrella coverage; identity theft coverage and more.
*This material is provided for informational purposes only. For detailed coverage information, please refer to The Hanover’s policy language.
About The Hanover
The Hanover Insurance Group, Inc. (NYSE: THG), based in Worcester, Mass., is the holding company for a group of insurers that includes The Hanover Insurance Company, also based in Worcester; Citizens Insurance Company of America, headquartered in Howell, Mich., and their affiliates. The Hanover offers a wide range of property and casualty products and services to individuals, families and businesses through an extensive network of independent agents, and has been meeting its obligations to its agent partners and their customers for more than 150 years. Taken as a group, The Hanover ranks among the top 40 property and casualty insurers in the United States. For more information, please visit www.hanover.com or contact The Howes Insurance Agency.
-Suzanne M. Brozek, AAI
THE HANOVER GEARS UP TO OFFER POPULAR
CONNECTIONS™ AUTO PRODUCT IN MASSACHUSETTS
– Massachusetts Drivers to Benefit from New Product Innovations–
WORCESTER, Mass. (November 9, 2007)
The Hanover Insurance Group, Inc. (NYSE: THG), a leading writer of auto, home and business insurance in Massachusetts, announced today that the company is driving to the finish line with plans to offer its popular Connections™ Auto product exclusively through its valued independent agent partners in Massachusetts.
With Connections Auto, Massachusetts drivers will benefit from product innovations and competitive prices not currently available to Massachusetts drivers.
"We are very excited that the new environment now enables us to introduce our innovative Connections Auto product to drivers in Massachusetts," said Vincent Nieroda, president of The Hanover’s Massachusetts personal lines group. "This will be the first of many improvements and innovations we will deliver to our agent partners and their customers."
The innovations The Hanover will introduce include:
Diminishing deductibles—Collision damage deductibles will be reduced by $100 at each renewal, for each year a policyholder goes without a chargeable accident, up to a maximum of $500. For example, if a policyholder has a $500 collision deductible and does not have a chargeable collision for five or more years, the company will waive the deductible entirely if the policyholder is involved in an accident.
Lease/loan gap coverage—This protection covers the difference between what a policyholder owes on his or her auto loan or lease and what the vehicle is worth before it is totaled. As a result, in the event that a policyholder is involved in an accident and his or her car is a total loss, Connections Auto will cover the unpaid balance on a lease or loan—even if it is more than the value of the vehicle.
Accident forgiveness—The Hanover under certain conditions will waive the surcharge for one at‐fault accident under a driver’s policy every 36 months.
In addition to these distinctive coverages, The Hanover also will make available new and innovative coverages such as expanded rental reimbursement, which pays eligible car rental costs for an extended time if an insured’s vehicle is damaged in an accident, and new vehicle replacement cost, which pays for a new vehicle if an insured’s vehicle is involved in an accident and declared a total loss within one year of purchase.
Available in 17 other states countrywide, Connections Auto has been highly successful because of its ability to offer competitive coverages, pricing and the fast quotes that consumers have come to expect.
The Hanover will request approval of Connections Auto from the Department of Insurance on November 19 and plans to offer the product for new and renewal business effective on or after April 1.
To help ensure that customers receive the best combination of coverage and cost, Connections Auto—like all of The Hanover’s products—will be sold exclusively through a network of independent agents.
"Soon, Massachusetts drivers will be able to do what drivers across the country have been doing for years—purchase their insurance from companies that are competing aggressively for their business," said Edward Ruhl, regional vice president at The Hanover. "But, new regulations and more choice often can be confusing. That’s why we believe that the advice of an independent insurance agent will be more valuable than ever in helping customers to get the most out of their car insurance."
Connections Auto is part of The Hanover’s total account solution for personal lines insurance, which is backed by responsive claims and customer service. The company’s full suite of products also includes Connections Home, a unique approach to homeowners insurance; specialty coverage for ATVs, personal watercraft, jet skis, manufactured homes and collector cars; personal umbrella coverage; identity theft coverage and more.
*This material is provided for informational purposes only. For detailed coverage information, please refer to The Hanover’s policy language.
About The Hanover
The Hanover Insurance Group, Inc. (NYSE: THG), based in Worcester, Mass., is the holding company for a group of insurers that includes The Hanover Insurance Company, also based in Worcester; Citizens Insurance Company of America, headquartered in Howell, Mich., and their affiliates. The Hanover offers a wide range of property and casualty products and services to individuals, families and businesses through an extensive network of independent agents, and has been meeting its obligations to its agent partners and their customers for more than 150 years. Taken as a group, The Hanover ranks among the top 40 property and casualty insurers in the United States. For more information, please visit www.hanover.com or contact The Howes Insurance Agency.
House Approves Creation of a Federal Disaster Insurance Program
By JOSEPH B. TREASTER, NY Times
Published: November 9, 2007
The House of Representatives approved legislation yesterday that would put the federal government into the home insurance business to deal with natural disasters like hurricanes and the recent wildfires in California.
The legislation, which passed on a vote of 258 to 155, would require the federal government to lend billions of dollars to states to help pay for damage to homes and businesses. The measure now goes to the Senate, where it has the backing of Senators Hillary Rodham Clinton of New York and Bill Nelson in Florida.
The Bush administration has said it would veto the plan because it takes potential business away from private insurers and potentially exposes the government “to steep losses in certain years.”
But support in the Senate is growing to help people whose homes are vulnerable to natural disasters. Senator Chris Dodd, Democrat of Connecticut, who has signaled that he backs the bill approved by the House, introduced two other bills yesterday to help homeowners cope with hurricanes. One would provide a tax credit to offset the rising cost of coverage. The other would provide federal money for people to strengthen their homes against storms and floods.
In the last month, the House has voted to extend the insurance subsidy program that was created after Sept. 11, 2001, to pay for up to $100 billion in damage in a terrorist attack. The bill is now before the Senate. The administration dropped its opposition to the terrorism insurance bill after legislators required insurance companies to pay a larger share of the losses from an attack.
In opposing the home insurance bill, the Office of Management and Budget said federal subsidies would reduce the pressure on homeowners to pay to fortify their homes and would take tax money from people all over the country to pay for losses by others living in risky areas.
The bill does not establish a specific threshold for when government loans would begin to flow. It would make individual states eligible for assistance once they were facing disaster costs that exceed 1.5 times the amount of premiums collected from homeowners and businesses in the previous year. In 2006, the insurers collected $13 billion in premiums in Florida. So damage would have to be about $20 billion to activate the federal loans. Hurricane Andrew, in 1992, caused more than $20 billion in damage in today’s dollars. Insured losses in Hurricane Katrina ran to more than $41 billion.
“When a state is overwhelmed by a mega-event, it seems fair that there’s a line of credit,” said Ben McKay, the head of the Washington office for the Property Casualty Insurers Association of America. But many insurers opposed the legislation. Marc Racicot, the president of the American Insurance Association, said the legislation would “interfere with the private market.”
The legislation also lays out a plan for states to create insurance funds, as Florida and some other states have already done. It also would allow them to collectively sell bonds, widely known as catastrophe bonds, that would provide more capital to pay disaster losses and thus, in theory, make home insurance more widely available and less costly. There is no direct cost to the government in the bond program, but the Office of Management and Budget contended that the legislation would create an implicit guarantee of federal backing for the bonds.
Representatives Ron Klein and Tim Mahoney, Democrats of Florida who are authors of the legislation, have argued that government backing would be required for only the worst disasters. They also argue that a reduction in the potential losses for private insurance companies would lead the companies to offer more coverage at lower prices.
Support for the bill has picked up as people in Florida struggle with insurance prices that routinely run into the thousands of dollars for an average house.
Some Congressional reluctance evaporated as the fires in California destroyed 2,000 homes and underscored the argument of proponents that home insurance was not only a coastal issue.
The National Association of Realtors is among the strong supporters of the legislation. It says “the inability to obtain affordable insurance is a serious threat to the real estate market.”
J. Robert Hunter, the director of insurance at the Consumer Federation of America, said he favored creation of a group of state insurance funds that would help spread the risk of paying for natural disasters.
But he said he was concerned that the legislation neither required homeowners to take measures to protect their homes nor required states and companies to set rates that accurately reflect the risk of damage. “If rates are too low, people will build on barrier islands,” he said.
Published: November 9, 2007
The House of Representatives approved legislation yesterday that would put the federal government into the home insurance business to deal with natural disasters like hurricanes and the recent wildfires in California.
The legislation, which passed on a vote of 258 to 155, would require the federal government to lend billions of dollars to states to help pay for damage to homes and businesses. The measure now goes to the Senate, where it has the backing of Senators Hillary Rodham Clinton of New York and Bill Nelson in Florida.
The Bush administration has said it would veto the plan because it takes potential business away from private insurers and potentially exposes the government “to steep losses in certain years.”
But support in the Senate is growing to help people whose homes are vulnerable to natural disasters. Senator Chris Dodd, Democrat of Connecticut, who has signaled that he backs the bill approved by the House, introduced two other bills yesterday to help homeowners cope with hurricanes. One would provide a tax credit to offset the rising cost of coverage. The other would provide federal money for people to strengthen their homes against storms and floods.
In the last month, the House has voted to extend the insurance subsidy program that was created after Sept. 11, 2001, to pay for up to $100 billion in damage in a terrorist attack. The bill is now before the Senate. The administration dropped its opposition to the terrorism insurance bill after legislators required insurance companies to pay a larger share of the losses from an attack.
In opposing the home insurance bill, the Office of Management and Budget said federal subsidies would reduce the pressure on homeowners to pay to fortify their homes and would take tax money from people all over the country to pay for losses by others living in risky areas.
The bill does not establish a specific threshold for when government loans would begin to flow. It would make individual states eligible for assistance once they were facing disaster costs that exceed 1.5 times the amount of premiums collected from homeowners and businesses in the previous year. In 2006, the insurers collected $13 billion in premiums in Florida. So damage would have to be about $20 billion to activate the federal loans. Hurricane Andrew, in 1992, caused more than $20 billion in damage in today’s dollars. Insured losses in Hurricane Katrina ran to more than $41 billion.
“When a state is overwhelmed by a mega-event, it seems fair that there’s a line of credit,” said Ben McKay, the head of the Washington office for the Property Casualty Insurers Association of America. But many insurers opposed the legislation. Marc Racicot, the president of the American Insurance Association, said the legislation would “interfere with the private market.”
The legislation also lays out a plan for states to create insurance funds, as Florida and some other states have already done. It also would allow them to collectively sell bonds, widely known as catastrophe bonds, that would provide more capital to pay disaster losses and thus, in theory, make home insurance more widely available and less costly. There is no direct cost to the government in the bond program, but the Office of Management and Budget contended that the legislation would create an implicit guarantee of federal backing for the bonds.
Representatives Ron Klein and Tim Mahoney, Democrats of Florida who are authors of the legislation, have argued that government backing would be required for only the worst disasters. They also argue that a reduction in the potential losses for private insurance companies would lead the companies to offer more coverage at lower prices.
Support for the bill has picked up as people in Florida struggle with insurance prices that routinely run into the thousands of dollars for an average house.
Some Congressional reluctance evaporated as the fires in California destroyed 2,000 homes and underscored the argument of proponents that home insurance was not only a coastal issue.
The National Association of Realtors is among the strong supporters of the legislation. It says “the inability to obtain affordable insurance is a serious threat to the real estate market.”
J. Robert Hunter, the director of insurance at the Consumer Federation of America, said he favored creation of a group of state insurance funds that would help spread the risk of paying for natural disasters.
But he said he was concerned that the legislation neither required homeowners to take measures to protect their homes nor required states and companies to set rates that accurately reflect the risk of damage. “If rates are too low, people will build on barrier islands,” he said.
Thursday, November 8, 2007
Homeowners’ Defense Act will help spur debate on growing issue
WASHINGTON, D.C., Nov. 6, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”) applauds Senators Hillary Clinton (D-N.Y.) and Bill Nelson (D-Fla.) for introducing the Homeowners' Defense Act of 2007, intended to address the growing problem of the availability and affordability of natural disaster insurance.
The legislation introduced by Sens. Clinton and Nelson is companion legislation to H.R. 3355, introduced earlier this year by Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.). The proposal contains two titles, one to create a National Catastrophe Risk Consortium and one to create a National Homeowners Insurance Stabilization Program. Both programs are intended to help prevent potential insolvencies and make the private insurance market more stable, ultimately making catastrophe insurance more available before and after a major disaster. The Consortium program would allow multiple states to pool their catastrophic risk, thereby hopefully achieving an economy of scale and risk diversity that will lead to a lower cost of reinsurance than states could achieve independently. The Stabilization program would allow the Treasury Department to make loans to states and their reinsurance plans to ensure their continued liquidity in the aftermath of a natural catastrophe.
“The Big ‘I’ is pleased that Senators Clinton and Nelson have introduced this legislation aimed at easing the natural disaster insurance crisis facing many communities,” says Charles E. Symington, Jr., Big “I” senior vice president of government affairs and federal relations. “Natural disaster risk requires a national solution, and we applaud the Senators for advancing a proposal to attempt to solve this problem. Introduction of this legislation in the Senate, coupled with expected House action on the issue this week, is focusing attention on the severity of the problem. The Big ‘I’ thanks Senators Clinton and Nelson for proposing a concrete solution.”
The Big “I” has been a leader in advocating for natural disaster solutions, testifying on several occasions before the House Financial Services Committee and the Senate Banking Committee on the need for Congress to consider legislation to stabilize the insurance market for natural disaster risk.
“As the representatives of the independent insurance agents who sell homeowners’ insurance, we are grateful to Senators Clinton and Nelson for their leadership in advancing an idea that could encourage both a healthy and vibrant private market as well as secure state and regional reinsurance programs,” says John Prible, Big “I” assistant vice president for federal government affairs. “Specifically, the creation of a National Catastrophe Risk Consortium could offer both states and private market participants an opportunity to benefit from a pooling of catastrophic risk diversified by type of peril and geographic region. The creation of a National Homeowners’ Insurance Stabilization Program, meanwhile, could provide for a level of stability for state and regional reinsurance programs that is currently absent.“
Founded in 1896, IIABA (the Big “I”) is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
The legislation introduced by Sens. Clinton and Nelson is companion legislation to H.R. 3355, introduced earlier this year by Reps. Ron Klein (D-Fla.) and Tim Mahoney (D-Fla.). The proposal contains two titles, one to create a National Catastrophe Risk Consortium and one to create a National Homeowners Insurance Stabilization Program. Both programs are intended to help prevent potential insolvencies and make the private insurance market more stable, ultimately making catastrophe insurance more available before and after a major disaster. The Consortium program would allow multiple states to pool their catastrophic risk, thereby hopefully achieving an economy of scale and risk diversity that will lead to a lower cost of reinsurance than states could achieve independently. The Stabilization program would allow the Treasury Department to make loans to states and their reinsurance plans to ensure their continued liquidity in the aftermath of a natural catastrophe.
“The Big ‘I’ is pleased that Senators Clinton and Nelson have introduced this legislation aimed at easing the natural disaster insurance crisis facing many communities,” says Charles E. Symington, Jr., Big “I” senior vice president of government affairs and federal relations. “Natural disaster risk requires a national solution, and we applaud the Senators for advancing a proposal to attempt to solve this problem. Introduction of this legislation in the Senate, coupled with expected House action on the issue this week, is focusing attention on the severity of the problem. The Big ‘I’ thanks Senators Clinton and Nelson for proposing a concrete solution.”
The Big “I” has been a leader in advocating for natural disaster solutions, testifying on several occasions before the House Financial Services Committee and the Senate Banking Committee on the need for Congress to consider legislation to stabilize the insurance market for natural disaster risk.
“As the representatives of the independent insurance agents who sell homeowners’ insurance, we are grateful to Senators Clinton and Nelson for their leadership in advancing an idea that could encourage both a healthy and vibrant private market as well as secure state and regional reinsurance programs,” says John Prible, Big “I” assistant vice president for federal government affairs. “Specifically, the creation of a National Catastrophe Risk Consortium could offer both states and private market participants an opportunity to benefit from a pooling of catastrophic risk diversified by type of peril and geographic region. The creation of a National Homeowners’ Insurance Stabilization Program, meanwhile, could provide for a level of stability for state and regional reinsurance programs that is currently absent.“
Founded in 1896, IIABA (the Big “I”) is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
Wednesday, November 7, 2007
If a storm hits, are you covered?
There are a lot of events that a typical home insurance policy don't cover
By Gerri Willis, CNN
August 24 2007: 3:57 PM EDT
NEW YORK (CNNMoney.com) -- The floods and rain in the Midwest continue to cause severe problems there. We spoke with one family whose home was destroyed by a mudslide.
The Partingtons' have had State Farm Insurance for about 35 years. They pay $1,300 a year in premiums. They even had an earthquake rider on their policy. What the Partingtons' didn't have was any mudslide coverage - something no basic homeowners insurance has. Now, with their home wiped out, they probably won't be covered for any of the damage.
Just because you have homeowner's insurance doesn't mean you are fully covered during a storm.
You may wonder why something like this isn't covered by insurance. But in fact, there are a lot of events that insurance doesn't cover. Typical homeowner policies do not cover floods, earthquakes, mudslides, sinkholes, war or nuclear accidents.
In the case of mudslides, you may be covered if you have flood insurance. A policy may cover mudslide damages as long as the mud is carried by a river or stream of water. So if a dam breaks and picks up a hillside and carries it into your home, you may be covered.
But a flood policy will not cover damage if a hillside becomes saturated as a result of rainfall and slowly begins to move. That's considered earth movement.
Like earthquake insurance, the only people who buy this kind of insurance are those who are at a high risk of it happening. Unless the risk is spread out, insurance companies don't want to touch this.
There are some products that cover landslides. But they are very expensive. On a $500,000 house, the deductible for a landslide is $1,000. The premium is $2,500 a year, according to Independent Insurance Agent Jerry Miller.
You might also be able to get mudslide insurance from a higher-end company, but again it will be very pricey.
If you live near (or on) a severe hillside, or if you live in a hilly area that has heavy rainfall or an area that has experienced a mudslide in the past, you might consider these expensive options.
Get flood insurance if you're worried about flood risk. The National Flood insurance program has preferred pricing for people who don't fall within a flood zone. It may only be a couple hundred bucks a year.
You may also want to talk to a soil engineer. They would be able to examine the ground and determine how stable it is. If you're really worried about a mudslide, it might be time to move.
There are a lot of events that a typical home insurance policy don't cover
By Gerri Willis, CNN
August 24 2007: 3:57 PM EDT
NEW YORK (CNNMoney.com) -- The floods and rain in the Midwest continue to cause severe problems there. We spoke with one family whose home was destroyed by a mudslide.
The Partingtons' have had State Farm Insurance for about 35 years. They pay $1,300 a year in premiums. They even had an earthquake rider on their policy. What the Partingtons' didn't have was any mudslide coverage - something no basic homeowners insurance has. Now, with their home wiped out, they probably won't be covered for any of the damage.
Just because you have homeowner's insurance doesn't mean you are fully covered during a storm.
You may wonder why something like this isn't covered by insurance. But in fact, there are a lot of events that insurance doesn't cover. Typical homeowner policies do not cover floods, earthquakes, mudslides, sinkholes, war or nuclear accidents.
In the case of mudslides, you may be covered if you have flood insurance. A policy may cover mudslide damages as long as the mud is carried by a river or stream of water. So if a dam breaks and picks up a hillside and carries it into your home, you may be covered.
But a flood policy will not cover damage if a hillside becomes saturated as a result of rainfall and slowly begins to move. That's considered earth movement.
Like earthquake insurance, the only people who buy this kind of insurance are those who are at a high risk of it happening. Unless the risk is spread out, insurance companies don't want to touch this.
There are some products that cover landslides. But they are very expensive. On a $500,000 house, the deductible for a landslide is $1,000. The premium is $2,500 a year, according to Independent Insurance Agent Jerry Miller.
You might also be able to get mudslide insurance from a higher-end company, but again it will be very pricey.
If you live near (or on) a severe hillside, or if you live in a hilly area that has heavy rainfall or an area that has experienced a mudslide in the past, you might consider these expensive options.
Get flood insurance if you're worried about flood risk. The National Flood insurance program has preferred pricing for people who don't fall within a flood zone. It may only be a couple hundred bucks a year.
You may also want to talk to a soil engineer. They would be able to examine the ground and determine how stable it is. If you're really worried about a mudslide, it might be time to move.
Tuesday, November 6, 2007
As Auto Insurance Changes Approach, Massachusetts Insurers Add Perks
By Sarah Shemkus, Cape Cod Times, Hyannis, Mass.
(Note: All MA Auto insurers will begin to announce their new "perk" offerings in the coming weeks/months. This is only the beginning! - The Howes Insurance Agency)
Nov. 2--With managed competition in auto insurance just weeks away from becoming a reality in Massachusetts, some companies have already started adding new services to their policies to help attract and retain customers.
"We are already seeing competition; we are already seeing new products," state insurance Commissioner Nonnie Burnes said this week at a meeting of the Property Casualty Insurers Association of America in Boston.
"It's a way of binding their customers to them."
Traditionally, Massachusetts' auto insurance system has limited what products insurance companies could offer and how much they could charge.
These restrictions have been blamed for the fact that only 19 companies now offer auto insurance in the state.
This year, however, Burnes introduced regulations that will open up the market to competitive rates and products. It is hoped this will attract new insurers to the state.
Though consumer advocates have been skeptical about the benefits of competition, state officials are optimistic.
"We're confident that good drivers everywhere will benefit from lower rates, better services, and more choice under managed competition," said Division of Insurance spokeswoman Kim Haberlin.
Insurance companies that already write auto policies in the state are beginning to take advantage of the pending changes.
Liberty Mutual announced yesterday that, as of Jan. 1, 2008, all new and renewed auto policies in Massachusetts will include, at no added cost, four benefits previously unavailable in the state.
Insurance policies offered under the managed competition system are scheduled to become available April 1, 2008. Companies intending to offer competitive products on that date must file their rates with the state Division of Insurance by Nov. 19.
"We're giving our existing customers and customers that come on before April 1 a head start on receiving some of those benefits," said Liberty Mutual spokesman Glenn Greenberg.
With these additional features, policyholders will be able to receive the full replacement cost of a new car that is totaled in an accident or stolen within a year or 15,000 miles after purchase. Currently, the car's value would quickly depreciate and a policyholder could end up receiving less than it would cost to replace the vehicle.
The new package will also enhance rental car insurance, expand towing coverage and offer full replacement cost for certain mechanical parts damaged in an accident.
"This is what competition is all about," said Greenberg, calling the new benefit package one of the first innovations in Massachusetts auto insurance policies in decades.
MetLife Auto & Home last week announced that it has added complimentary identity theft resolution services to the auto policies of 200,000 Massachusetts customers.
The company already offered this protection in 48 states, said director of product management Matt Cullina.
The added service has received "overwhelmingly positive response" from customers, he said.
MetLife is also hoping to file additional enhancements with the state over the next month, which could add features similar to the ones that Liberty Mutual just introduced, Cullina said.
These benefits would be offered at no additional cost as a way to distinguish MetLife auto insurance as the Massachusetts market becomes more competitive.
"We really strive to be different in the marketplace, and we do it with product differentiation," Cullina said.
Though he could not guarantee that these new features would be approved, he said that the company has "gotten some indications that there's promise."
Another company positioning itself for success in the state's impending competitive market is Travelers, whose subsidiary Premier Insurance currently offers auto coverage here.
Earlier this month, Travelers announced that Premier would be renamed Travelers of Massachusetts in order to take advantage of the parent company's positive brand image and high level of name recognition.
The move to managed competition was the catalyst for the change, said Susan Scott, senior vice president and general counsel with Travelers.
"I believe that with the more generally recognized name it will help us compete in the more aggressively competitive market," Scott said.
By Sarah Shemkus, Cape Cod Times, Hyannis, Mass.
(Note: All MA Auto insurers will begin to announce their new "perk" offerings in the coming weeks/months. This is only the beginning! - The Howes Insurance Agency)
Nov. 2--With managed competition in auto insurance just weeks away from becoming a reality in Massachusetts, some companies have already started adding new services to their policies to help attract and retain customers.
"We are already seeing competition; we are already seeing new products," state insurance Commissioner Nonnie Burnes said this week at a meeting of the Property Casualty Insurers Association of America in Boston.
"It's a way of binding their customers to them."
Traditionally, Massachusetts' auto insurance system has limited what products insurance companies could offer and how much they could charge.
These restrictions have been blamed for the fact that only 19 companies now offer auto insurance in the state.
This year, however, Burnes introduced regulations that will open up the market to competitive rates and products. It is hoped this will attract new insurers to the state.
Though consumer advocates have been skeptical about the benefits of competition, state officials are optimistic.
"We're confident that good drivers everywhere will benefit from lower rates, better services, and more choice under managed competition," said Division of Insurance spokeswoman Kim Haberlin.
Insurance companies that already write auto policies in the state are beginning to take advantage of the pending changes.
Liberty Mutual announced yesterday that, as of Jan. 1, 2008, all new and renewed auto policies in Massachusetts will include, at no added cost, four benefits previously unavailable in the state.
Insurance policies offered under the managed competition system are scheduled to become available April 1, 2008. Companies intending to offer competitive products on that date must file their rates with the state Division of Insurance by Nov. 19.
"We're giving our existing customers and customers that come on before April 1 a head start on receiving some of those benefits," said Liberty Mutual spokesman Glenn Greenberg.
With these additional features, policyholders will be able to receive the full replacement cost of a new car that is totaled in an accident or stolen within a year or 15,000 miles after purchase. Currently, the car's value would quickly depreciate and a policyholder could end up receiving less than it would cost to replace the vehicle.
The new package will also enhance rental car insurance, expand towing coverage and offer full replacement cost for certain mechanical parts damaged in an accident.
"This is what competition is all about," said Greenberg, calling the new benefit package one of the first innovations in Massachusetts auto insurance policies in decades.
MetLife Auto & Home last week announced that it has added complimentary identity theft resolution services to the auto policies of 200,000 Massachusetts customers.
The company already offered this protection in 48 states, said director of product management Matt Cullina.
The added service has received "overwhelmingly positive response" from customers, he said.
MetLife is also hoping to file additional enhancements with the state over the next month, which could add features similar to the ones that Liberty Mutual just introduced, Cullina said.
These benefits would be offered at no additional cost as a way to distinguish MetLife auto insurance as the Massachusetts market becomes more competitive.
"We really strive to be different in the marketplace, and we do it with product differentiation," Cullina said.
Though he could not guarantee that these new features would be approved, he said that the company has "gotten some indications that there's promise."
Another company positioning itself for success in the state's impending competitive market is Travelers, whose subsidiary Premier Insurance currently offers auto coverage here.
Earlier this month, Travelers announced that Premier would be renamed Travelers of Massachusetts in order to take advantage of the parent company's positive brand image and high level of name recognition.
The move to managed competition was the catalyst for the change, said Susan Scott, senior vice president and general counsel with Travelers.
"I believe that with the more generally recognized name it will help us compete in the more aggressively competitive market," Scott said.
Monday, November 5, 2007
Thursday, November 1, 2007
Commerce sale the end of an era
By Bob Kievra TELEGRAM & GAZETTE STAFF rkievra@telegram.com
WEBSTER— The Spanish insurer seeking to buy Commerce Group Inc. sketched out an ambitious road map for the property and casualty insurer yesterday as local investors tallied their profits from a business founded 36 years ago behind a Main Street restaurant.
Shares of Commerce jumped 17 percent yesterday, closing at $36.49 a share, slightly below the $36.70 a share Mapfre SA of Madrid said Tuesday night it would pay for Commerce Group, the largest automobile insurer in Massachusetts.
In a conference call with analysts yesterday, officials with Mapfre, Spain’s largest insurer, said the $2.2 billion deal, which represented an 18 percent premium over Commerce’s closing price Tuesday, was fairly priced and came at a time when the exchange rate is highly favorable compared to the U.S. dollar.
Commerce directors will recommend approval of the transaction and Mapfre executives hope to close the deal in the second quarter of 2008 following a positive vote by Commerce shareholders at a meeting tentatively scheduled for January.
Mapfre Vice Chairman Domingo Sugranyes said Commerce was a perfect fit for his company, the 10th largest nonlife insurer in Europe. Mapfre had been seeking an entry point in the United States and found one in Commerce, a company with strong brand recognition, excellent agency relationships and a market leader in Massachusetts.
Officials at Commerce did not return calls seeking comment yesterday. The deal includes a provision that would require Commerce to pay Mapfre $68 million if the merger is terminated under certain circumstances, according to documents filed with the Securities and Exchange Commission.
In a presentation, Mapfre officials said it intends to retain Commerce’s management team while designing a growth strategy in a number of new states, including providing dedicated services to the Hispanic community.
Commerce, with annual premiums of $1.9 billion, has been trying to grow its market outside of Massachusetts but the company, founded by Arthur J. Remillard Jr. behind a Friendly’s, still generates 88 percent of its premiums from Massachusetts.
Mr. Sugranyes said Commerce had many of the attributes his company was seeking. “What we’ve found with this proposed transaction with Commerce is an excellent platform to do precisely that much better than we could do on our own,” he said. “This will be a very good and profitable investment immediately.”
Mapfre said yesterday its profit for the first nine months rose 11 percent to $730 million, or 505.2 million euros, compared with a pro-forma profit of 456.6 million euros a year ago.
Commerce posted net earnings for the first nine months of $171.4 million, down from $182.1 million for the same period a year earlier.
Mapfre, which does some business in Florida and New Jersey, has skills and products useful to Commerce, Mr. Sugranyes said.
Mapfre has diverse product lines, an integrated information technology platform, and a small bilingual operation in Florida that can be used in other states. The company may also aid Commerce in purchasing reinsurance products.
Commerce, which once produced a company brochure describing itself as “The Opportunity Maker” was not thought to be up for sale, but the deal makes sense for several reasons, some analysts said. Commerce, which controls 31.5 percent of the Massachusetts automobile market, prospered under a 30-year-old system in which state regulators established annually a rate that all automobile insurers had to charge the state’s 4 million drivers.
But Gov. Deval L. Patrick has led an effort to scrap that system and his administration has authored a so-called managed competition plan that will enable insurers to establish their own rates beginning April 1, 2008.
Keefe, Bruyette & Woods analyst Dean Evans yesterday raised his rating on Commerce from “underperform” to “market perform” and said in an interview Commerce was facing significant headwinds because of declining rates and deteriorating loss trends.
“I tend to think the switch to managed competition was a negative for them,” he said. “I view this deal as richly priced, and for Commerce shareholders, they should jump at the offer.”
Mapfre executives said they would retain Commerce’s existing management but did not specify, what, if anything, would happen to the company’s 2,200 employees, including 1,800 in Webster. Commerce officials said Tuesday night Mapfre has indicated it would maintain Commerce’s employees in Central Massachusetts.
That scenario makes sense as there is no labor consolidation savings, as Mapfre does not have any U.S. operations, said FTN MidWest analyst Charles D. Hamilton. Employees are likely surprised by the deal but they won’t see any impact, he said.
Mr. Hamilton said he expects Commerce will alter its premium base both demographically and geographically. Mapfre wants to add revenues from the Hispanic community which likely means Commerce will enter markets in Florida, Puerto Rico, and elsewhere, he said. “I expect this will push the accelerator down a lot harder,” he said.
Webster Selectmen Chairman Mark G. Dowgiewicz said company officials called him and Town Administrator Raymond W. Houle Jr. Tuesday to alert them to the sale. “That was real nice of them. When it comes to jobs in Webster, Commerce is it,” Mr. Dowgiewicz said. “To lose them would have been a catastrophe, but they assured me nothing was going to change in town. The employees are staying. The upper management are staying.”
Commerce is the town of Webster’s biggest taxpayer, with taxes of $455,117 in fiscal 2007, according to Tax Collector Maryann C. McGeary. That tax bill accounts for about 3 percent of the total $14.8 million that Webster raised in taxes for fiscal 2007.
The all-cash deal prompted a flurry of phone calls yesterday from local investors, said Gary H. Sherr, vice president of Carl P. Sherr & Co., a Worcester investment advisory and brokerage service company. Before Commerce was listed on the Nasdaq Stock Market and the New York Stock Exchange, Mr. Sherr’s company was the sole market maker for Commerce, Mr. Sherr said. “Investors should like this deal but it creates some uncertainty because they’ll have to pay taxes,” said Mr. Sherr. “But it’s a good problem to have.”
Mr. Sherr echoed Mr. Hamilton’s comments, suggesting the sale, while unexpected, is a positive outcome for a company whose founder had retired and was facing a change in how it needed to do business.
Mr. Remillard’s earliest investors included white-collar professionals from Worcester and blue-collar laborers from Webster, everyone from lawyers to janitors, Mr. Sherr said. “Like Microsoft has been to Seattle, Commerce has been to Webster,” he said. “They all put their own money up. It really is an American success story right here in Central Massachusetts.”
Telegram & Gazette reporter John Dignam contributed to this story.
By Bob Kievra TELEGRAM & GAZETTE STAFF rkievra@telegram.com
WEBSTER— The Spanish insurer seeking to buy Commerce Group Inc. sketched out an ambitious road map for the property and casualty insurer yesterday as local investors tallied their profits from a business founded 36 years ago behind a Main Street restaurant.
Shares of Commerce jumped 17 percent yesterday, closing at $36.49 a share, slightly below the $36.70 a share Mapfre SA of Madrid said Tuesday night it would pay for Commerce Group, the largest automobile insurer in Massachusetts.
In a conference call with analysts yesterday, officials with Mapfre, Spain’s largest insurer, said the $2.2 billion deal, which represented an 18 percent premium over Commerce’s closing price Tuesday, was fairly priced and came at a time when the exchange rate is highly favorable compared to the U.S. dollar.
Commerce directors will recommend approval of the transaction and Mapfre executives hope to close the deal in the second quarter of 2008 following a positive vote by Commerce shareholders at a meeting tentatively scheduled for January.
Mapfre Vice Chairman Domingo Sugranyes said Commerce was a perfect fit for his company, the 10th largest nonlife insurer in Europe. Mapfre had been seeking an entry point in the United States and found one in Commerce, a company with strong brand recognition, excellent agency relationships and a market leader in Massachusetts.
Officials at Commerce did not return calls seeking comment yesterday. The deal includes a provision that would require Commerce to pay Mapfre $68 million if the merger is terminated under certain circumstances, according to documents filed with the Securities and Exchange Commission.
In a presentation, Mapfre officials said it intends to retain Commerce’s management team while designing a growth strategy in a number of new states, including providing dedicated services to the Hispanic community.
Commerce, with annual premiums of $1.9 billion, has been trying to grow its market outside of Massachusetts but the company, founded by Arthur J. Remillard Jr. behind a Friendly’s, still generates 88 percent of its premiums from Massachusetts.
Mr. Sugranyes said Commerce had many of the attributes his company was seeking. “What we’ve found with this proposed transaction with Commerce is an excellent platform to do precisely that much better than we could do on our own,” he said. “This will be a very good and profitable investment immediately.”
Mapfre said yesterday its profit for the first nine months rose 11 percent to $730 million, or 505.2 million euros, compared with a pro-forma profit of 456.6 million euros a year ago.
Commerce posted net earnings for the first nine months of $171.4 million, down from $182.1 million for the same period a year earlier.
Mapfre, which does some business in Florida and New Jersey, has skills and products useful to Commerce, Mr. Sugranyes said.
Mapfre has diverse product lines, an integrated information technology platform, and a small bilingual operation in Florida that can be used in other states. The company may also aid Commerce in purchasing reinsurance products.
Commerce, which once produced a company brochure describing itself as “The Opportunity Maker” was not thought to be up for sale, but the deal makes sense for several reasons, some analysts said. Commerce, which controls 31.5 percent of the Massachusetts automobile market, prospered under a 30-year-old system in which state regulators established annually a rate that all automobile insurers had to charge the state’s 4 million drivers.
But Gov. Deval L. Patrick has led an effort to scrap that system and his administration has authored a so-called managed competition plan that will enable insurers to establish their own rates beginning April 1, 2008.
Keefe, Bruyette & Woods analyst Dean Evans yesterday raised his rating on Commerce from “underperform” to “market perform” and said in an interview Commerce was facing significant headwinds because of declining rates and deteriorating loss trends.
“I tend to think the switch to managed competition was a negative for them,” he said. “I view this deal as richly priced, and for Commerce shareholders, they should jump at the offer.”
Mapfre executives said they would retain Commerce’s existing management but did not specify, what, if anything, would happen to the company’s 2,200 employees, including 1,800 in Webster. Commerce officials said Tuesday night Mapfre has indicated it would maintain Commerce’s employees in Central Massachusetts.
That scenario makes sense as there is no labor consolidation savings, as Mapfre does not have any U.S. operations, said FTN MidWest analyst Charles D. Hamilton. Employees are likely surprised by the deal but they won’t see any impact, he said.
Mr. Hamilton said he expects Commerce will alter its premium base both demographically and geographically. Mapfre wants to add revenues from the Hispanic community which likely means Commerce will enter markets in Florida, Puerto Rico, and elsewhere, he said. “I expect this will push the accelerator down a lot harder,” he said.
Webster Selectmen Chairman Mark G. Dowgiewicz said company officials called him and Town Administrator Raymond W. Houle Jr. Tuesday to alert them to the sale. “That was real nice of them. When it comes to jobs in Webster, Commerce is it,” Mr. Dowgiewicz said. “To lose them would have been a catastrophe, but they assured me nothing was going to change in town. The employees are staying. The upper management are staying.”
Commerce is the town of Webster’s biggest taxpayer, with taxes of $455,117 in fiscal 2007, according to Tax Collector Maryann C. McGeary. That tax bill accounts for about 3 percent of the total $14.8 million that Webster raised in taxes for fiscal 2007.
The all-cash deal prompted a flurry of phone calls yesterday from local investors, said Gary H. Sherr, vice president of Carl P. Sherr & Co., a Worcester investment advisory and brokerage service company. Before Commerce was listed on the Nasdaq Stock Market and the New York Stock Exchange, Mr. Sherr’s company was the sole market maker for Commerce, Mr. Sherr said. “Investors should like this deal but it creates some uncertainty because they’ll have to pay taxes,” said Mr. Sherr. “But it’s a good problem to have.”
Mr. Sherr echoed Mr. Hamilton’s comments, suggesting the sale, while unexpected, is a positive outcome for a company whose founder had retired and was facing a change in how it needed to do business.
Mr. Remillard’s earliest investors included white-collar professionals from Worcester and blue-collar laborers from Webster, everyone from lawyers to janitors, Mr. Sherr said. “Like Microsoft has been to Seattle, Commerce has been to Webster,” he said. “They all put their own money up. It really is an American success story right here in Central Massachusetts.”
Telegram & Gazette reporter John Dignam contributed to this story.
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