N.H. Considers Premium Tax Cut; Insurer CEOs Update Big ‘I’ Agents
N.H. Considers Premium Tax Cut; Insurer CEOs Update Big ‘I’ Agents
Taxes, the favorite subject of politicians in New Hampshire, was a topic also on the minds of property casualty executives who gathered at the White Mountains’ imposing Mountain View Grand Resort & Spa in Whitefield, N.H., last month. The executives used the occasion of the annual meeting of the Independent Insurance Agents and Brokers of New Hampshire (IIABNH) to rally behind an idea now under study in Concord to reduce the 2 percent premium tax insurers pay as a way to attract more insurers to the Granite State.
The state’s domestic insurers are behind the tax cut, noted the lobbyist for the New Hampshire Domestic Insurers Association, George Roussos, who is with the firm, Orr and Reno.
“This is potentially a huge thing,” said Roussos.
Insurance Commissioner Roger Sevigny is also optimistic, although he is awaiting the economic impact study by Ernst & Young now underway. “I think it will be a good thing if we can create economic development and jobs without severely affecting the state budget,” he told Insurance Journal.
Sevigny and Roussos noted that several midwestern states, including Illinois, Iowa and Nebraska, have had success lowering their premium tax but that no state on the eastern seaboard has done so.
“This could be an opportunity to make our state more attractive for insurers,” Sevigny said.
The study is expected by the end of the year, in time to fashion legislation for January.
At the IIABNH gathering, Dwight Bowie, chief executive officer of Peerless Insurance Co., put his company on record as supporting the tax cut, as did Patrick Haveron, president and chief executive officer of Preserver Group, Inc., and Michele Streton, who manages Progressive Insurance Co.’s auto accounts in Maine, New Hampshire and Vermont.
Reducing the premium tax from 2 to 1 percent or another figure could not only attract new companies but also serve to retain existing carriers, according to Bowie, whose parent, Liberty Mutual, is based in Massachusetts. Noting that Iowa has been successful in attracting insurers and recently reduced its premium tax to attract even more, Bowie commented, “The thinking is right. One percentage point can have a big impact.”
“We want to grow and this could be an incentive,” Preserver’s Haveron commented, noting that it would help shave expenses.
While they did not miss the opportunity when asked by IIABNH President Robert Nash to weigh in on lower taxes, the executives’ primary reason for appearing was to update agents on their own companies.
Bowie touted his company’s new advanced technology for commercial lines rating. The new system includes a “dynamic interview” process that he said helps make submissions and underwriting decisions easier, more consistent and more accurate.
“We want to be the first company for agents and their small business accounts,” Bowie declared.
By the end of the year, Peerless expects to have upgraded its personal lines automation as well. Agents will be able to access it through their own agency management systems.
Preserver Group, a New Jersey-based, privately-owned holding company that concentrates on small-to-medium commercial accounts through its Mountain Valley Indemnity, North East Insurance and Preserver Insurance Co., thinks it is in a good position to grow.
“We are doing well because of the regional presence we have. We have people dedicated to this market,” Haveron said. The insurer maintains offices in Bedford, N.H., and Scarborough, Me., as well as Albany, N.Y., and Paramus, N.J.
He said future growth would be tied to clearly defined objectives, discipline and consistency in underwriting, and improved service and communication with for agents
“Everyone talks about disciplined underwriting but we are practicing it everyday,” he said.
A few big carriers can throw the market into a downspin, he observed, but while his company will be aggressive quoting on business, he said it will not be aggressive in lowering prices.
“We will compete but we will not chase,” he said.
He said Preserver realizes that holding the line on pricing means it has to perform for agents in other ways, including improving its technology to simplify the business process and communicating better with agents. Technology improvements are due early next year, he said.
Progressive’s Streton touted her company’s expertise in auto. “We only write things that move. So we focus on them,” she told agents.
She candidly acknowledged that internal surveys show independent agents do not feel her company (which also writes business via direct channels and heavily advertises these methods) is committed to agents. She hinted at coming changes that agents would like.
(Streton spoke prior to her company’s announcement of its new Drive from Progressive branding effort for independent agents. See separate story in this issue.)
Among the changes Streton did cite was Progressive’s decision, in response to agent requests, to begin writing commercial auto in New Hampshire this month.
IIABNH’s Nash gave a report on the association, citing 8 percent membership growth in 2003 and a Westport Insurance agents errors and omissions program that is growing.
“We’re healthy, active and we’re growing,” he said of IIABNH, adding that the group is considering the purchase of its own building in part to accommodate the need for a larger education facility.