Courteous, unwasteful and up face circular pricing!
By Jay Fitzgerald, Boston Herald
Mar. 29--Known representing its super-cheap auto assurance in Massachusetts, Progressive Insurance is at current progressively raising its rates.
Ohio-based Progressive, which drove into the states recently deregulated assurance market-place with little bonus offers that left-hand numerous rivals in its rear-view mirror, desire grow its premiums close by an intend of 4.9 percent on Wednesday.
Progressive, which plans to before long proffer assurance representing motorcycles and recreational vehicles, called the auto-premium grow a criterion adjusting after being in the Massachusetts market-place representing almost a year.
Despite the planned hike, Progressives prices are quiet little compared with numerous rivals, some of whom are also tweaking their own rates upward after a year of extreme charge competition.
Some rivals conditions Progressive"s move is a textbook case in dot of a alien arriving in a market, immolation super-low rates and then jacking up prices after it has lured customers to its products.
"This is keeping with their strategy," said Doug Bailey, a spokesman representing Quincy-based Arbella Insurance, which says it desire before long drop its intend measure close by circular 2 percent beneath the states new managed-competition market.
Arbella has been an candid critic of Progressive and of conditions Insurance Commissioner Nonnie Burnes. Arbella is suing the conditions representing allegedly giving unfair competitive breaks to new assurance companies that move ahead the Massachusetts market.
Burnes, who led the manner representing the Patrick administrations deregulation of the auto-insurance industry, has rejected Arbella"s unfair-competition claims. In a assertion late hindmost week, she dismissed criticisms that Progressive is at current hiking its prices.
"It"s unclouded were seeing (some) certain signals from the industry," she said, clearly referring to charge competition and insurance-industry heroic Geico"s announced plans to move ahead the Massachusetts market-place in May.
Insurers are eagerly awaiting let go of Geico"s planned rates, beneath the assumption that it desire deploy a like move as Progressive: approach in with little prices to draw recompense attention to and customers. Geico"s rates won"t be released until Burnes business officially reviews and OKs Geicos employ to do accountability here.
"They are a tremendous competitor," Cathy Wilton-Bransch, Massachusetts outcome overseer representing Progressive, said of Maryland-based Geico, a subsidiary of Warren Buffett"s Berkshire Hathaway.
Wilton-Bransch dismissed judgment from rivals that Progressive is jacking up prices at current that it controls an estimated 1.2 percent of the Bay State auto assurance market.
"There"s talk exterior there that there"s a bait-and-switch (tactic) and,
frankly, that class of (rhetoric) makes me a little angry," said Wilton-Bransch, whose compact offered charge cuts of circular 20 percent hindmost year, after Progressive entered the Massachusetts market.
Indeed, some assurance producing officials privately conditions Progressive"s actions amount to nothing more than criterion capitalism: proffer specials, sap the competition and establish a market-place foothold.
"What"s improper with that?" said single producing insider, who asked not to be named.
But Arbella"s Bailey said assurance isn"t a collection of other products. Once customers coin up with an insurer, they customarily pierce with them, allowing insurers to later grow prices.
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