Des Moines-based EMC Insurance Cos. announced today it will exit the personal lines insurance market over the next 18 months, in a move to invest more capital and resources to expand its commercial lines business. 

The shift will affect a total of 121 EMC employees — less than 5 percent of the company’s workforce — including 84 employees in the Des Moines area and 37 who work in EMC branch offices or other locations, the company said in a release. About half of EMC’s more than 2,500 employees are based at its downtown Des Moines headquarters. 

Personal lines, which include auto, homeowners and associated policies, currently account for 7 percent of EMC’s premiums.  

“The personal lines marketplace is highly competitive and has evolved significantly since we first entered it back in the 1950s. This is a decision we made with careful, strategic consideration given our long history in the business,” said Bruce G. Kelley, EMC’s president and CEO. “We are focused on maximizing profit and growth potential and believe that can best be accomplished by further strengthening and expanding our commercial lines.” 

EMC in August reported a net loss of $5 million for the second quarter, due largely to greater than expected losses from its workers’ compensation coverage. The company also said at that time that its personal lines business was continuing to underperform expectations.  

The company, which is among the top 50 property/casualty insurers in the country based on net written premium of $2 billion, is the second Greater Des Moines-based insurer to exit the personal lines market in recent years. West Des Moines-based GuideOne announced its transition out of personal lines in August 2016 in a move to redeploy its capital to its primary business of insuring churches. Personal lines had represented about 15 percent of GuideOne’s sales. 

At EMC, the earliest any positions will be eliminated is Feb. 1, 2019, and some positions will remain open into 2020 depending upon business need and job function. The last day of EMC personal lines ongoing operations will occur during the first quarter of 2020. 

“We greatly appreciate the hard work and dedication of our team members and want to make sure those impacted are provided the support and tools needed to successfully navigate this transition,” Kelley said. “We made the deliberate decision to announce this change early, so they are well-equipped to plan for the future.” 

Affected team members will be offered severance packages and career transition services and will have opportunities to apply for other open positions within the company. 

EMC has entered into an agreement with another insurance carrier to provide EMC-licensed agents an opportunity to transfer their EMC personal lines policies. The company said the agreement will allow EMC to dedicate more time and resources to other lines in its portfolio, and provide a smooth transition for policyholders and independent agents it works with in 23 states to sell and service personal lines policies. 

“We are pleased with this agreement and what it means for those who have, up until now, relied upon EMC for their personal lines policies,” said Kelley. “Partnering with another carrier allows us to offer agents and policyholders a viable alternative with a well-established insurer – one that has experience in these types of arrangements.”