Tokio Marine, Mercury strike home insurance deal
Thousands of Californians on track to lose home insurance will be able to keep it after two insurers struck a deal to maintain coverage after one of them announced a pullout.
In April, two subsidiaries of Tokio Marine Holdings — Tokio Marine America Insurance Co. and Trans Pacific Insurance Co. — filed to withdraw from the California home insurance market, leaving their combined 12,556 customers without home insurance. But on Thursday, Mercury Insurance announced it had arranged to transition interested Tokio Marine customers to coverage under Mercury.
Not every policyholder will be offered coverage, but the “overwhelming majority” will, according to a spokesperson for Mercury. The amount customers pay may also change as they switch over to Mercury rates, the spokesperson said.
Tokio Marine was the 18th largest property and casualty insurer as of 2022, the latest data available from the California Department of Insurance. Mercury Insurance is the ninth largest in the state.
In a statement to the Chronicle in April, a Tokio Marine spokesperson said the company is primarily a commercial insurer that offered personal coverage only in California. The company continues to offer commercial insurance in California and across the country.
“Given the small segment of personal lines business we write and escalating costs, we cannot sustainably support personal lines coverages and do not plan to return,” the spokesperson said.
Tokio Marine is one of several insurance companies that have exited the state or stopped writing new policies in California as they cite increased costs. But Mercury has never stopped writing new policies, according to the company.
Tokio Marine and Mercury started working on the deal in January, according to a news release. The deal was reviewed by the Department of Insurance. As part of it, more than a dozen Tokio Marine agents have been offered appointments as Mercury agents to assist customers transitioning between the two companies, according to Mercury.
“Innovative solutions surface during challenging times,” Gabriel Tirador, CEO and director of Mercury, said in a statement. “A diverse group of entities worked together on this project with the common goal of providing coverage for California insurance consumers.”