We are a leading provider of private passenger automobile insurance in Massachusetts.
In addition to private passenger automobile insurance (which represented 59.6%
of our direct written premiums in 2015), we offer a portfolio of property and
casualty insurance products, including commercial automobile, homeowners, dwelling
fire, umbrella and business owner policies. Operating exclusively in Massachusetts
and New Hampshire through our insurance company subsidiaries, Safety Insurance
Company ("Safety Insurance"), Safety Indemnity Insurance Company ("Safety
Indemnity") and Safety Property and Casualty Insurance Company ("Safety
P&C") (together referred to as the "Insurance Subsidiaries"),
we have established strong relationships with independent insurance agents,
who numbered 924 in 1,102 locations throughout Massachusetts and New Hampshire
during 2015. We have used these relationships and our extensive knowledge of
the Massachusetts market to become the third largest private passenger automobile
carrier, capturing an approximate 10.2% share of the Massachusetts private passenger
automobile insurance market, and the second largest commercial automobile carrier,
with an 14.1% share of the Massachusetts commercial automobile insurance market
in 2015 according to statistics compiled by Commonwealth Automobile Reinsurers
("CAR"). We are also the fourth largest homeowners insurance carrier
in Massachusetts with a 7.2% share of the Massachusetts homeowners insurance
market. In addition, we were also ranked the 45th largest automobile writer
in the country according to A.M. Best, based on 2014 direct written premiums.
We were incorporated under the laws of Delaware in 2001, but through our predecessors,
we have underwritten insurance in Massachusetts since 1979.
We Have Strong Relationships with Independent Agents. In 2015, Independent
agents accounted for approximately 63.4% of the Massachusetts automobile insurance
market measured by direct written premiums as compared to approximately 31.3%
nationwide, based on data made available by A.M. Best. For that reason, our
strategy is centered around, and we sell exclusively through, a network of independent
agents, who numbered 924 in 1,102 locations throughout Massachusetts and New
Hampshire during 2015. In order to support our independent agents and enhance
our relationships with them, we:
provide our agents with a portfolio of property and casualty insurance products
at competitive prices to help our agents address effectively the insurance needs
of their clients;
provide our agents with a variety of technological resources which enable us
to deliver superior service and support to them; and
offer our agents competitive commission schedules and profit sharing programs.
Through these measures, we strive to become the preferred provider of the independent
agents in our agency network and capture a growing share of the total insurance
business written by these agents in Massachusetts and New Hampshire. We must
compete with other insurance carriers for the business of independent agents.
We Have a History of Profitable Operations. In 34 out of 35 years since our
inception in 1979, we have been profitable. The lone year where we did not have
profits was 2015 when we were impacted by claims related to the highest recorded
snowfall totals in Massachusetts history. We have achieved our profitability,
among other things, by:
maintaining a consistent number of private passenger automobile exposures we
underwrite, which totaled 471,924 in 2015 compared to 477,238 in 2011;
growing our commercial automobile exposures we underwrite, which totaled 68,591
in 2015 compared to 49,150 in 2011;
growing our homeowner book of business which had total exposures of 162,703
in 2015 compared to 130,563 in 2011;
taking advantage of the institutional knowledge our management has amassed
during our long operating history in the Massachusetts market;
introducing new lines and forms of insurance products;
investing in technology to simplify internal processes and enhance our relationships
with our agents; and
maintaining a high-quality investment portfolio.
We Are a Technological Leader. We have dedicated significant human and financial
resources to the development of advanced information systems. Our technology
efforts have benefited us in two distinct ways. First, we continue to develop
technology that empowers our independent agent customers to make it easier for
them to transact business with their clients and with the Insurance Subsidiaries.
In our largest business line, private passenger automobile insurance, our agents
now submit approximately 99.0% of all applications for new policies or endorsements
for existing policies to us electronically through our proprietary information
portal, the Agents Virtual Community ("AVC"). Our agents can also
submit commercial automobile and homeowners insurance policies electronically
over AVC. Second, our investment in technology has allowed us to re-engineer
internal back office processes to provide more efficient service at lower cost.
We Have an Experienced, Committed and Knowledgeable Management Team. Our senior
management team owns approximately 4.9% of the common stock of Safety Insurance
Group, Inc. on a fully diluted basis. Our senior management team has an average
of over 29 years of experience with Safety. The team has demonstrated an ability
to operate successfully within the Massachusetts automobile and homeowner insurance
markets.
To achieve our goal of increasing shareholder value, our strategy is to maintain
and develop strong independent agent relationships by providing our agents with
a full package of insurance products and information technology services. We
believe this strategy will allow us to:
further penetrate the Massachusetts, New Hampshire and Maine private passenger,
commercial automobile and homeowners insurance markets;
implement rates, forms and billing options that allow us to cross-sell homeowners,
dwelling fire, and personal umbrella in the personal lines market and business
owner policies, commercial property package and commercial umbrella in the commercial
lines market in order to capture a larger share of the total Massachusetts property
and casualty insurance business written by each of our independent agents; and
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continue to expand our technology to enable independent agents to more easily
serve their customers and conduct business with us, thereby strengthening their
relationships with us.
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