Friday, November 02, 2007

Boston Globe discovers odd relationship between competition and service

From the Globe: "Auto insurers readying their deals - As competition nears, benefits take shape"

Some Massachusetts automobile insurers are starting to gear up for competition, offering new policy benefits at no extra cost, adopting more recognizable names, and promising their agents competitive pricing.

Liberty Mutual Group of Boston and MetLife Auto and Home of Warwick, R.I., have both won approval from the Division of Insurance for enhancements to their existing policy benefits, which they plan to add at no extra cost to the customer. Both companies said the state's decision to move to auto insurance competition next year precipitated their filings.

The moves show that insurers are starting to distinguish themselves from rivals as Massachusetts prepares to introduce auto insurance competition for the first time in 30 years. To be sure, the full impact of competition won't be known until Nov. 19, when insurers are scheduled to file their rate plans for next year for customers who start renewing their policies after April 1. Customers may see even more insurers jumping into the fray, slashing rates and offering beefed-up policies.
Right now, insurance rates are set by Beacon Hill so Massachusetts can't gain from the competitive advantage offered by Geico or eSurance. Since price controls have such a long history of success, I can't imagine why the Bay State is reversing their policy.

1 comment:

Dave said...

Dagnabit, Eric, don't you understand that, as really good Progressives, residents of Massachusetts are way more than happy to pay higher rates on insurance so long as it's the government that is controlling prices? They fulling embrace the concept that government is the perfect decider of prices, and that only price controls will save us from nasty old capitalists.