Arbella, MetLife, Main Street Amend Mass. Rates; OneBeacon Unveils Plans

November 28, 2007

Several Massachusetts auto insurers have amended last week’s filings to further lower rates and increase discounts for safe drivers while another revealed its plans for 2008 under the new managed care system.

MetLife Auto & Home, one of the top five personal auto insurers in Massachusetts, has filed amended rates and discounts with which include increased discounts for the safest drivers, no matter where they reside. Over 76 percent of the company’s customers will see a rate decrease under the filing, with over 30 percent of its customers seeing double-digit decreases – and the best drivers receiving rate decreases of more than 20 percent.

Arbella Insurance Group, the third largest auto insurer in Massachusets, said some of its customers could see their premium costs plummet by up to 28 percent next year under a proposed rate filing made this week to the Massachusetts Division of Insurance.

According to Arbella’s filing, the average rate cut for the company’s approximately 350,000 drivers will be about 7.7 percent. However, about a third of Arbella’s drivers could see rate cuts of 20 percent or more and more than half could see cuts greater than 10 percent, according to the figures filed today with the state. An estimated eight percent of Arbella customers are eligible to receive a cut of 28 percent.

“In all, we think 75 percent of our drivers will see rate decreases in the first year of managed competition, and a third of them will see really significant decreases,” said John Donohue, chairman and CEO of Arbella. “This is only the beginning as we make further discounts and enhancements available to our best customers. We have vowed to be among the most competitive domestic companies in the auto insurance market. And we will be.”

In addition to the rate cuts, Arbella introduced a five-point “Arbella Customer Care Package” that provides drivers with significant policy enhancements at no extra charge. Included in the customer package are increased coverage for major items such as new vehicle replacement costs, substitution transportation coverage, enhanced towing and labor coverages, replacement coverage on mechanical parts and a new benefit — trip interruption coverage.

The company also announced expanded discount credits for those customers who have both auto and homeowners policies with Arbella. They will receive a 20 percent discount off of homeowners and 5 percent off auto policies. The auto discount will include insurance policies for condominiums and rentals as well as for customers whose homes are insured by the Commonwealth’s FAIR plan. This sizeable combined auto and home discount is believed to be new and unmatched in Massachusetts, according to the insurer.

Additionally, Arbella announced it will offer an enhanced multi-car credit to those with multiple vehicles and a loyalty credit for all customers that renew their policies with Arbella. A separate discount will be offered to auto insurance customers who complete a state-approved advanced driver training prograOneBeacon Insurance Group has announced expanded auto insurance coverages along with price reductions of up to 28 percent for its Massachusetts customers under managed competition. Nearly 70 percent of OneBeacon’s Massachusetts customers will see price reductions for auto coverage beginning April 1, 2008, pending regulatory approval.

The Main Street America Group has filed for a 7.6 percent average premium decrease for its NGM Insurance Co.

“As a provider of auto and home insurance products in Massachusetts since 1928, we remain fully committed to this market and are very excited about the opportunities that auto reform will bring to Massachusetts and all of our independent agent-customers throughout the commonwealth,” said Steven T. Berry, president of Main Street America’s New England Region.

Berry said that with the new rate, 40 percent of Main Street America’s Massachusetts policyholders will see a premium decrease of 15 percent or more on their existing NGM auto policies, while 30 percent will see a premium decrease of up to 15 percent.

Additionally, Main Street America is introducing 10 pricing tiers that will provide pricing flexibility and an opportunity to more accurately reflect savings for a wide variety of the commonwealth’s drivers. The tiering components include discounts for multi-policy, coverage package selected, number of drivers, vehicle age for liability coverage, student away at school, good student, farm use, no lapse in coverage and the commonwealth’s Safe Driver Insurance Plan (SDIP).

“We are also implementing a 20 percent multi-policy discount to benefit our private-passenger auto policyholders that also carry a homeowners’ policy with either our NGM or Main Street America Assurance Company carriers,” Berry said.

Also on April 1, 2008, Main Street America plans to introduce its new Auto Elite program in Massachusetts that will include accident forgiveness and new car replacement coverage.

“Meanwhile, OneBeacon, which had been silent during last week’s first round of rate announcements, now says that its auto product in Massachusetts will incorporate many of the elements of the company’s premier OneChoice Auto product, which is available in other states. It includes replacement cost coverage, identity theft resolution services and accident forgiveness.

Later in the year, the company expects to file for state approval of OneChoice CustomPac, its flagship package that bundles auto, home and ancillary coverages under a single policy featuring a common renewal date and single bill. OneBeacon anticipates that CustomPac may be Massachusetts’ first package offering.

“We are excited about bringing our hallmark products to local customers as we transition to the commonwealth’s new approach to auto insurance. Beginning in April, we can finally provide our local customers with access to our innovative solutions at a competitive price,” said Dick Connors, president of OneBeacon’s New England personal lines operations.

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