Your company is great! A lot lower rates than other companies.
J. Massey
Orlando, FL
By NANCY REARDON
IN OR OUT?
Top national insurance agencies are still steering clear of the Massachusetts auto market, even though the state's insurance commissioner opened the market up to "managed competition" April 1.
Progressive stands alone in its decision to start selling auto policies online in May, and eventually branch out to independent agents in mid-2009.
Allstate, Geico, Nationwide and State Farm are holding out, with representatives for all four big national insurers saying Insurance Commissioner Nonnie Burnes' reforms efforts are still under review.
"We continue to assess the progress being made toward a more competitive market for auto insurance," said Hank Nayden, vice president and legislative counsel for Geico.
Similarly, a State Farm spokesman said the insurer is "still reviewing the new market reforms" and Allstate said it is "encouraged" and "monitoring the situation closely."
So why the cold feet?
"My sense is that companies are looking for markets they view as stable," said Jim Harrington, a spokesman for the Massachusetts Insurance Federation. "Massachusetts has a reputation of being a market where there's been an abundance of regulation. Now there appears to be a fresh look on that."
With the exception of the state's short-lived attempt at increasing competition in 1977, the state's Division of Insurance has typically established a new set of auto insurance rates for all insurers each year. Massachusetts has recently been the most heavily regulated market in the country.
Advocates for Burnes' "managed competition" plan hope a deregulated environment would entice national insurers that had shunned Massachusetts to sell policies here, inviting competition and potentially lowering rates for the best drivers. Currently, only about 20 insurers actively sell auto insurance in Massachusetts.
These are exactly the changes auto insurers want, Harrington said. The problem, he said, is convincing them that the changes are here to stay.
"Insurance companies are concerned about the duration of this changed attitude in Massachusetts," he said.
And while time may be the best fix, Harrington noted, "When someone makes a decision like Progressive, that may entice other insurers."
Like most companies, Progressive had been watching the Massachusetts market and steps toward reform for years, Progressive spokeswoman Cristy Cote said.
"Once managed competition was put in place, we felt the time was right," Cote said.
In fact, instead of watching how the system rolls out, Progressive decided to sell policies online first to "make products available to Massachusetts consumers as soon as possible," she said.
Nancy Reardon is at nreardon@ledger.com.
Originally published by By NANCY REARDON, The Patriot Ledger.
(c) 2008 Patriot Ledger, The; Quincy, Mass.. Provided by ProQuest Information and Learning. All rights Reserved.
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