Business Moves

March 10, 2008

Progressive, Massachusetts

Progressive Insurance said it plans to begin selling personal auto insurance in Massachusetts starting May 1 if state regulators approve the company’s rate filings, which it submitted to the Bay State’s insurance department this morning.

The Mayfield Village, Ohio-based company said it will first offer policies through its Web site, and later through independent agents. Progressive already sells commercial auto coverage in Massachusetts.

Progressive said the rates it filed were an average 18 percent lower than those paid by Massachusetts drivers in 2007.

Cathy Wilton-Bransch, Massachusetts product manager for Progressive, said the company wanted to enter Massachusetts quickly under the new managed competition system, which is why it’s decided to phase in its buying options over time, starting online.

The company said it hoped to begin offering the coverage through independent agents in the Bay State by the second quarter of next year.

“We appreciate the work the Division has done to create a regulatory environment that allows companies to compete for customers,” said Wilton-Bransch. “We hope that come May 1, drivers will check out progressive.com and see what we have to offer.”

Progressive will be a little behind its competitors by entering in May. The state’s existing 19 auto carriers’ competitive rates go into effect April 1. These carriers have already begun marketing their new rates.

One other carrier has indicated an interest in entering the private auto insurance market now that the state has moved to a more competitive system. Last November, Liberty Mutual Group announced that one of its companies ?Keene, N.H.-based Peerless Insurance ? would return to the Massachusetts auto insurance market after a 20-year absence.

Peerless Insurance said it would file rates on or after February 15, 2008, and plans to begin offering auto and home insurance through independent agents in the second quarter.

Peerless already sells commercial insurance in the state through about 150 independent agent locations.

Liberty Mutual

Boston-based Liberty Mutual Insurance will open a 300-person office in Springfield, Mass. in the third quarter to handle growth, some of which is expected from the state’s move to a managed competition auto insurance system.

Governor Deval Patrick joined Liberty Mutual Group Chairman, President and CEO Edmund F. Kelly, as the insurance executive the plan in the western Massachusetts city. The state’s fourth largest auto insurer has signed a 10-year lease for office space on Federal Street in the STCC Park, formerly the Springfield Armory.

“The long-awaited introduction of managed competition by Governor Patrick and Insurance Commissioner Burnes demonstrates their commitment to making the state a more attractive and competitive car insurance market, and we intend to be well-positioned for growth,” Kelly said. “Massachusetts consumers will benefit from increased choice, and the state coffers will benefit from increased employment.”

The new Springfield office will host a variety of business operations, including a customer service call center to support Liberty Mutual’s car and home insurance business in Massachusetts as well as the rest of the country. Other operations will include claims and legal administration.

Kelly said Liberty Mutual will start hiring and training for the office this spring and plans to have over 150 employees in place by year-end. The company’s expectations over time are to have in excess of 300 employees in its Springfield office.

In anticipation of the April 1, 2008 start of managed competition, Liberty Mutual will also add 30 sales positions across the state by this April, a 50 percent increase over current sales force levels.

Meadowbrook, ProCentury

Michigan-based Meadowbrook Insurance Group, Inc. reported it will acquire ProCentury Corp. in a transaction valued at approximately $272.6 million in cash and stock to be paid to ProCentury shareholders.

The combined entity will adopt and operate under the Meadowbrook name and will continue to trade on the NYSE under the ticker symbol “MIG.”

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Insurance Journal West March 10, 2008
March 10, 2008
Insurance Journal West Magazine

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