Narragansett Bay Insurance Co. has entered into a renewal rights agreement with Adirondack Insurance Exchange that should bring to the company 4,500 Long Island homeowner’s policies with approximately $10 million in annual premium.
The deal bolsters the company’s footprint in New York, and also sets the stage for a march down the Eastern seaboard for Narragansett Bay, which is already in the process of getting approval to write homeowners’ policies in New Jersey, said CEO Stewart “Nick” H. Steffey Jr.
As part of the Adirondack agreement, 38 agents that service these policies will receive appointments with Pawtucket, Rhode Island-based Narragansett Bay. Those agents will also retain appointments with Adirondack — which is part of OneBeacon Insurance Group and insures roughly one out of every 33 homes in Suffolk County, New York.
For Adirondack, the deal allows the company to lessen its coastal homeowners’ exposure policies while retaining its relationships with agents who can continue to write auto and other package policies.
For Narragansett Bay, the deal nearly triples its presence in New York State, where it currently writes about 2,500 homeowners policies.
Steffey said Narragansett Bay’s goal is to write $35 to $40 million in annual homeowners’ premium in New York by the end of 2011.
The deal, Steffey said, “allows us to get a very seasoned book of business that we could model carefully. A lot of these policies go back to the 1970s with Commercial Union and then OneBeacon and then Adirondack, so they’re sticky with the agents that have this business.”
The agreement has been in the works since last year, when Narragansett Bay and Adirondack began modeling and pricing the policies – which will all be within $100 of the Adirondack policy price, Steffey said.
In addition to the 38 agents who have already received appointments, Narragansett is meeting with roughly 60 agents about writing homeowners’ policies with the company.
Narragansett Bay is a specialty underwriter that focuses on single-family, owner-occupied homes in the Eastern seaboard states and relies heavily on sophisticated, catastrophe-modeling programs to determine its homeowner’s rates. The company recently received a $200 million funding package from several private equity firms to build up its coastal homeowners’ business.
As Narragansett Bay establishes itself outside of New England, Steffey said that a similar type of renewal rights agreement with a Garden State insurer could be in the works in the not too distant future.
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