PAWTUCKET – A Columbus, Ohio-based insurance company’s decision to pull out of Rhode Island and reduce its offerings in Massachusetts might pay off for a Pawtucket insurance company.
State Auto Insurance Cos. has stopped writing new auto, home and business insurance policies in Rhode Island and will no longer offer home and auto coverage in Massachusetts as it continues to make adjustments following its affiliation with Patrons Mutual Group of Connecticut.
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Under an arrangement with State Auto, Narragansett Bay Insurance Co. will extend offers to State Auto customers in both states, starting Jan. 1. The agreement involves more than 10,000 home insurance policies and $9 million in total premiums.
“We are excited to be able to provide a growing and stable homeowners market in the Northeast as other carriers reexamine their strategies,” said Nick Steffey, CEO of Narragansett Bay. “This allows us to grow with both our current independent agents and new agent partners.”
A spokesman for State Auto said it was not immediately known how many total policyholders in Rhode Island and Massachusetts would be affected by the company’s decision to back out of Rhode Island. State Auto said it would continue to offer business and farm insurance in Massachusetts.
Kyle Anderson, State Auto’s director of media relations, said the decision had nothing to with the Rhode Island’s economic situation or the regulatory environment.
After the affiliation with Patrons in 2007, State Auto reexamined its business strategies. “It just didn’t benefit us to maintain the book of business in Rhode Island,” Anderson said.
Some in the local insurance industry have suspected insurers aren’t as interested in doing business in Rhode Island partly because of fears of losses from hurricane damage. Companies have become more leery of coastal insurance since Hurricane Katrina devastated the Gulf Coast in 2005. Coastal property owners have seen rates skyrocket and big deductibles for storm damage added to policies.
“We recognize that there continues to be consolidation and market retrenchment especially in coastal states,” Francis A. Mancini, president & CEO of Massachusetts Association of Insurance Agents, and Mark A. Male, executive vice president of the Independent Insurance Agents of Rhode Island, said in a joint statement. “We are encouraged and applaud NBIC and State Auto for working together to develop a cooperative solution for the independent agents and their customers.”
Certain aspects of the agreement between State Auto and Narragansett Bay are subject to regulatory approval by the Mass. Insurance Department and R.I. Department of Business Regulation.
As a further benefit to affected customers and new customers, NBIC will provide credits on their home owners policies where the same agent also writes the auto insurance.
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I now have Narragansett for my homeowner’s policies since Quincy Mutual stopped issuing them and I have find Narragansett to be very competitive on price and wonderful on customer service. I’m also very happy to do business with a local company.