Arbella cuts auto insurance rate to counter key rival

By JAY Edward Fitzgerald

Arbella Insurance is lowering its auto insurance rate by one percent point today, partially due to stiff competition posed by a new out-of-state rival that's aggressively jumped into the Bay State market since deregulating.

Arbella, one of the state's largest insurers, said its rate cut has already been approved by state regulators and adds up to about $4.5 1000000 in economy. The move is the largest rate cut by an insurance company since the state's new "managed competition" scheme was implemented April 1.

The decrease means that Arbella's average rate cut for this year is 8.7 percentage, compared with last year's average rate under the old regulated insurance scheme.

"Arbella has vowed to be among the most competitive auto insurers in the state and drivers should check us out earlier making any new determination about their insurance company," said Arbella Chief executive director John Donahue in a statement.

Asked if Arbella was reacting partly to progressive tense Insurance's aggressive low terms, an Arbella spokesman said, "Clearly, the marketplace is acquiring more competitive."

Ohio-based progressive tense entered the state marketplace in May - and instantly made waves with its super-low rates that are sometimes 20 percent less than rates offered by challenger. Arbella and the Bay State Association of Insurance Agents last month sued to block the Division of Insurance's ruling allowing Progressive to enter the state marketplace without instantly participating in the so- called "assigned-risk pool." That programme assigns bad drivers to insurers - and critics say progressive tense should share some of that load.

Kimberly Haberlin, a spokeswoman for Insurance Commissioner Nonnie Burnes, said recent rate cuts show that the new managed competition is workings. - jfitz@bostonherald.com

Originally published by By JAY Edward Fitzgerald.