EMC Insurance Exits Personal Lines Business; Safeco to Accept Accounts from Agents

October 31, 2018

Liberty Mutual’s Safeco insurance has agreed to accept the $132.5 million in personal lines business of Iowa-based EMC Insurance Companies. Safeco is offering EMC’s independent agents the opportunity to transition their EMC personal lines policies to Safeco beginning the first quarter of 2019.

Des Moines-based EMC said it has decided to dedicate itself to its commercial, reinsurances and life businesses across 43 states, which accounts for more than 90 percent of the company’s current $1.7 billion in premiums. About 7.8 percent of its business is personal lines.

The company said the agreement with Safeco will also allow EMC to provide a smooth transition for personal lines policyholders and for the independent agents in the more than 20 states where EMC sells personal lines policies.

“The personal lines marketplace is highly competitive and has evolved significantly since we first entered it back in the 1950s. This is a decision we made with careful, strategic consideration given our long history in the business,” said Bruce G. Kelley, president and CEO of EMC Insurance Companies, in prepared remarks. “We are focused on maximizing profit and growth potential and believe that can best be accomplished by further strengthening and expanding our commercial lines.”

EMC’s personal lines business is in the states of Alabama, Arizona, Arkansas, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Wisconsin and Wyoming.

Safeco signed a similar agreement with Donegal Mutual last month when that insurer decided to exit the personal lines business in seven states. Safeco agreed to accept the transfer of accounts worth $25 million in premium. Safeco has also done similar deals with QBE North America ($230 million in premium) and Mapfre in three states this year.

EMC management had been monitoring its personal lines business. in 2016, the company revamped the personal lines management and introduced new products. In its 2017 annual report, management wrote of the personal lines operation:

“Management believes that the overall quality of the personal lines book of business improved during 2017; however, that improvement was overshadowed by an increased level of catastrophe and storm losses. Management continues to closely monitor the performance of the personal lines business, and expects to expand personal lines into additional states in the future to further diversify the exposures of this business.”

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