Competition kicks in; Auto insurers sharpen their pencils.

COLUMN: In our opinion

The change to "managed competition" among companies that provide auto insurance in Massachusetts is having the desired effect - a drop in rates - considerably more quickly than most people expected.

Overall, the rates are expected to fall at least 7.8 percent for policies up for renewal on April 1, according to state Insurance Commissioner Nonnie S. Burns, a small but telling improvement from the 7.7 percent drop announced when the companies first filed their new rates last week. Since the late 1970s, state regulators set all auto insurance rates in Massachusetts.

Now insurers set their own rates, subject to approval by the state Division of Insurance. Besides lowering insurance rates, the much-needed shift to "managed competition" should increase product offerings for policy-holders. It also should add to the state's mix of companies offering auto insurance, creating even more competition to help bring insurance costs down.

State Attorney General Martha Coakley is less than satisfied with the reduction, which she said should be 11 percent on average. If she's right, more reductions in premiums could be on the way.

Either way, things appear to be moving in the right direction. One company, One Beacon Insurance of Boston, already has said it will cut rates by 7.2 percent instead of the 2.1 percent it originally announced. As state insurance officials noted, consumers also benefit from the many new benefits and discounts provided by insurers that are not reflected in the average cost of premiums.

The full impact of this long-overdue fix will not be felt for many months. But initial reports indicate that Massachusetts should soon be able to shed its reputation for having some of the most expensive car insurance rates in the country. That is a most welcome change.