Oregon Mutual Discontinues Personal Lines Business

Oregon Mutual president, Steve Patterson made a surprising announcement late last week. The company will no longer write personal lines business in all of the states the company serves. Patterson said the company is now issuing a new business moratorium and will stop writing new personal lines policies as soon as possible. 

The company will start the non-renewing of personal lines policies in January of 2023. 

Patterson said Oregon Mutual is now on the wrong side of history in today’s marketplace when it comes to personal lines. A recent report from AM Best on personal lines proves Patterson’s point. Best has revised its personal lines outlook from stable to negative. 

As you’ll see in another story in this issue of Weekly Industry News, AM Best Gives Personal Lines a Negative Outlook, deterioration of results for personal auto insurers is the reason. AM Best said rising loss costs, pressures on pricing and rising reinsurance costs as well as inflationary pressures influenced the decision. 

Patterson said Oregon Mutual is passionate about protecting and serving both its members and independent agency partners but it is now being negatively impacted. 

“Unfortunately, the last decade of persistent losses, combined with the commoditization of the personal lines marketplace, and growing regulatory uncertainty surrounding risk based underwriting and pricing have eroded our ability to profitably provide the personal lines products and services consistent with our value proposition,” Patterson said.

Oregon Mutual has spent a lot of time over the last few years trying to improve the company’s performance profitability in personal lines. Improvements have been made but it just hasn’t been good enough. 

“It is important to me that you know, this is a message and decision of self-
determination and not one of desperation,” he said. “Oregon Mutual is financially strong and highly rated, and we intend to keep it that way and build on that as we focus on our employees, agents, and members on commercial lines opportunities, including our farm and agriculture segments.”

Patterson said he understands this decision will cause many of you concerns and there is the potential for disruption in your agencies, however, like many companies, problems in personal lines keep piling up and growth in the company’s commercial lines business have not been able to offset them. 

“No part of this business plan is more difficult than having to reduce expenses to match a lower expected level of revenue. In this case it will mean a gradual reduction in our workforce aligned with the servicing and sales of Personal Lines policies that are being non-renewed,” he added. At the same time, Patterson emphasized there will be no changes in commercial lines. 

“We will not be reducing our commercial staff or the professionals working on our commercial policy administration systems,” Patterson said. “We also reaffirm and state our commitment to the first-rate claim service and agency support we provide and that you have come to know and trust.”

Patterson ended his news release with a statement that said Oregon Mutual will be developing and implementing a plan to adjust contingency profit-sharing and to help agencies during the transition out of personal lines. 

From now on, Oregon Mutual’s focus will be on retaining existing commercial lines business and writing new business in those lines. 

Patterson also said the answers to many questions can be found in the links below:

Frequently asked questions: https://cdn.ormutual.com/Portal/AgentResources/PDFs/agent_faqs_20220908.pdf

Patterson’s video message: https://cdn.ormutual.com/Portal/AgentResources/podcastvideos/agency_message-20220908.mp4

Patterson’s written comments: https://cdn.ormutual.com/Portal/AgentResources/PDFs/agency_announcement_from_steve_patterson_20220908.pdf