American States Insurance Co. shocked Spokane employees and independent agents Monday with a surprise announcement that it plans to close its 35-year-old commercial underwriting office.
The cost-cutting move will throw 34 workers, including manager Ken Bacon, out of work. Some employees had worked at the downtown office for three decades.
“The people here are just one big happy family,” Bacon said Tuesday. “This is breaking up our family, and it hurts.”
Bacon said the closure will have no impact on American States’ policies held by 25,000 Inland Northwest business customers.
But agents who represent the Indianapolisbased insurer lamented the loss of the office, which had intimate knowledge of the risks taken by local businesses. Agent Ian Cunningham said American States was a leader in insuring start-up businesses, building contractors and farmers who might otherwise be denied coverage.
“This is not going to be popular with agents, I can tell you that,” said Cunningham, who has written American States policies for 20 years. “The local underwriters know the city; they know the risk. This is a blow and a shock to us.”
Officials have not set a date for the closure, but Bacon expects it to occur before American States’ lease expires in August at the Jefferson 400 Building. The company leases the 12,000-squarefoot second floor.
Employees got the news 10 minutes after arriving at work Monday morning when executives from American States headquarters in Indianapolis made a surprise visit. Bacon said he never was told that his office might be closed.
Officials told employees that the move will save the company money. Plans call for American States commercial underwriting functions to be moved to the company’s Seattle office. Spokane employees have been invited to apply for jobs in Seattle.
Separately, 15 employees who handle claims processing and field support will remain in Spokane, Bacon said.
Bacon and American States agents are puzzled by the action because the Spokane office has been so successful. The office managed $40 million in annual premiums, Bacon said, making it the 11thlargest of American States’ 25 commercial underwriting offices.