Safety Insurance Group Increases Finances

Massachusetts auto insurance is always a mess – between the politics that are on every corner and all of the auto insurance companies more worried about their bottom lines than their customers, it is a wonder that anything ever gets done at all. However, Safety Insurance Group, the state’s second largest auto insurance company, has managed to do well for itself even though the state just mandated major cuts.

The state had said that auto insurance premiums had been too high, and everyone was forced to cut their premiums. However, Safety showed an increase in their auto insurance premiums of 0.7% when everyone else was cutting 12%.

Their written premiums rose 2% even though their profits dropped 20%. They had an increase in homeowners policies as well, but it was the auto insurance increases that had people wondering how they did it. It turns out that Safety actually bills car insurance premiums based on the driver and not some arbitrary number that other car insurance companies have been doing.

The auto insurance company has maintained for years that they follow a policy of “rate pursuit” which means they monitor their drivers closely and adjust their rates accordingly. They assign not only the proper risk, but the proper car insurance premium to each driver, and have thus come under the state’s radar.

They also had the fact that they had an increase in it loss ratio due to high claims in auto insurance makes their profit this year all that much more remarkable. It was down more than 100 basis points from last year, so that means they are taking in more in auto insurance premiums than they are putting out in claims.

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