The announcement yesterday that Liberty Mutual Group is selling off some renewal business to brokers and will deliver commercial insurance products for midsize business exclusively through independent agents and brokers has drawn an enthusiastic endorsement from an agents group.
The Professional Insurance Agents of Connecticut, New Hampshire, New Jersey and New York State Inc. said they applauded Liberty Mutual's support of the independent agency system.
Liberty said it was selling middle market direct sale renewal business to Arthur J. Gallagher, Hub International and USI Holdings Corp., as well as retiring its Wausau brand and creating a new commercial business unit, Liberty Mutual Middle Market, to work with independent agents.
Previously, Liberty Mutual transacted its middle market business using appointed agents and brokers under Wausau Insurance Company. The company also sold direct to clients through its "Business Markets" unit. Both distribution entities were in the package that was sold.
PIA said Liberty's action "illustrates the company's recognition that professional independent agents are the most agile and efficient force in helping its current and potential customers," said Diane Fowler, executive director of PIACT, PIANH, PIANJ and PIANY.
"The PIA affiliates of Connecticut, New Hampshire, New York and New Jersey commend Liberty Mutual for recognizing the needs of its clients in these difficult times," she said
PIA said the vast majority of middle market business insurance is not sold directly by companies but through agents and brokers. "Liberty Mutual's move is recognition of what consumers want–the expert advice of an agent," said Ms. Fowler.
"Midsize businesses in particular seek out independent agents because an agent will spend the time to evaluate each business' unique circumstances, find appropriate coverage and explain every facet of a policy. This type of service is invaluable to midsize businesses and is a business model we hope carriers will expand, as it serves personal lines clients and all commercial clients, regardless of size."
No sale price was announced by Liberty, but Gallagher said its part of the deal could eventually total $164 million.
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