EMC Drops High-Risk Private Auto Insurance Line
NU Online News Service, Jan. 26, 1:42 p.m. EST?EMC Insurance Group Inc. said it will stop writing nonstandard risk auto insurance business offered through its Farm and City Insurance Company unit because this line of business is not seen as part of the company's "core competency."[@@]
The Des Moines, Iowa-based insurer plans to institute nonrenewal procedures on all existing policies in this business. Effective dates for these actions will be determined by the requirements of the six states in which EMC conducts business and the terms of individual policies, the company said.
EMC Chief Executive Bruce Kelley observed that Farm and City Insurance Company is not a significant player in the nonstandard risk auto insurance marketplace and that this unit has struggled with increasing competition from both the standard and the nonstandard markets.
"Management has determined that this line of business does not represent a core competency of our insurance business," Mr. Kelley said, "and therefore could not justify the substantial amount of resources that would be required to improve its operating performance."
EMC said discontinuing this line of business won't have a material impact on operations of EMC Insurance Group Inc. In 2003, the Farm and City Insurance Company unit produced about $9.8 million of direct premium.
EMC--through its EMCASCO Insurance, Illinois EMCASCO and Dakota Fire Insurance--offers a number of p-c lines, including auto, property, liability and workers' compensation. Its EMC Underwriters offers excess and surplus lines of insurance. Additionally, the company sells p-c treaty reinsurance through EMC Reinsurance.
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