After news broke regarding Encompass’ decision to withdraw from the Commonwealth and The Hanover Insurance Company’s (“The Hanover”) agreement to act as its replacement carrier, we reached out to both companies to get a little more background information on the deal.
While we wanted to find out the reasons behind Encompass’ decision, more importantly, we knew our readers would be keen to learn the reasons why The Hanover decided to enter into this deal and how the Worcester-based insurer is handling the transition of former Encompass agents and policyholders.
Encompass officially notified the Acting Commissioner of Insurance of its withdrawal plans on March 2nd
Encompass officially notified Acting Commissioner Gary Anderson of its decision to intent to withdraw from the Commonwealth on March 2, 2017. The insurer, which is a subsidiary of Allstate, informed the Acting Commissioner of its plan to cease writing new business and to non-renew all its existing policies in the state. Encompass noted, however, that as part of its plan, it would continue to maintain its licenses to preserve the option of re-entering the Massachusetts personal lines marketplace in the future.
In response to a query from Agency Checklists on the reasons behind its decision, Encompass Spokesperson April Eaton sent us the following statement:
Encompass notified the Massachusetts Division of Insurance the company plans to withdraw from the state. This is occurring in Massachusetts where Encompass has less than one percent of the market share in the state. To ensure a smooth transition and minimize disruption for customers, we have entered into an agreement with The Hanover Insurance Company to issue renewal offers for nearly all Encompass policyholders starting with July renewals.
We decided the best strategic decision to make in order to minimize the impact to Encompass policyholders was to initiate a replacement carrier agreement with Hanover. We sought an agreement with a company with knowledge of the Massachusetts market that could help make this a seamless transaction for policyholders.
This change has no impact on Allstate or Esurance.”
The Hanover agrees to offer coverage to former Encompass policyholders
The Hanover entered into a replacement carrier agreement with Encompass for its Massachusetts’ personal lines insurance business. Per the agreement, The Hanover will offer coverage to former Encompass policyholders based upon those agencies that The Hanover appoints as its agents. The Allstate subsidiary will cease writing new business as of June 30, 2017.
Agency Checklists contacted The Hanover to find out a little bit more about why this deal made sense for The Hanover and how it is dealing with the transition. The following are Agency Checklists’ questions and The Hanover’s responses:
Why did The Hanover decide to enter into this agreement with Encompass?
The Hanover has entered into a replacement carrier agreement with Encompass to further strengthen our competitive position in Massachusetts as we build on our market position as the best partner for winning independent agents. We view this business as a natural complement to our existing business. The Hanover has a deep understanding of the Massachusetts market and the potential business profile is well aligned with our target customer base.
What are the benefits of The Hanover’s agreement with Encompass for Encompass’ agents?
The Hanover offers a strong commitment to the independent agency channel and its agents’ economics. We partner with fewer than 2,000 personal lines agencies and invest in products and services that help them grow, while offering their customers great protection. Coupled with our unique value proposition, agency insights, world class products, underwriting expertise, superior claims service, and comprehensive service center capabilities, we believe we are an outstanding partner.
How has The Hanover organized the transition for Encompass policyholders?
The Hanover is committed to making this a seamless transition and we have accounted for price, process, and coverage. Also, we have taken measures to line up the coverage between The Hanover and Encompass as best as possible, and we are confident that customers will be well protected with their new Hanover policy. Policyholders can expect to receive communications from The Hanover and Encompass leading up to the transition and expect minimal to no disruption from this agreement.
What are the time limits and date milestones for the transition under the agreement with Encompass?
Affected Encompass policyholders with renewal effective dates on or after 7/1/17 will be receiving a new policy from The Hanover.
What can the Encompass agents do on their end to help facilitate the transition for their agency and for their insureds?
We encourage the agents to reach out to us with any questions regarding the transition. Our local team is here to help make this a smooth process. We want to be sure all of the agents are armed with the knowledge and information they need to help best serve their customers.
How can agents get in touch with The Hanover if they have questions?
Paul James, AVP of marketing and distribution for personal lines at The Hanover– pjames@hanover.com
