Peninsula Insurance, a presence in Downtown Salisbury since 1960, will close July 2, causing 40 people to lose their jobs as the parent company consolidates services into a headquarters office in south-central Pennsylvania.

Eric Crouchley, president of the business, declined comment, but referred inquiries to Jeff Miller, Executive Vice President and Chief Financial Officer for Donegal in Marietta, Pa.

“The company is not closing. The (Salisbury) office is closing,” Miller said, adding the company’s two building on East Market Street will be sold.

One or two employees will relocate to Marietta and several will work remotely from their homes.

Customers will not be affected, since they have been mailing payments to the home office for many years.

“Peninsula has operated on our tech platform, so nothing will change. This is more of a consolidation to save expenses more related to internal and more efficient resources. We sell products through independent agents, so most of the customers deal with those independent agents,” Miller said.

Peninsula, he explained, has operated fairly independently of Donegal since it acquired the company in 2004. Consolidation will save money.

“We’re in a competitive industry and the expense structure is an important component of operating efficiently. We are also looking to expand the writing of the kind of business Peninsula has been writing for many years. Peninsula has a specialty insurance product, commercial garage insurance, for used car lots, repair shops, body shops. That line of business is unique and requires specialized underwriting.  We are going to expand the writing of that business,” Miller explained.

Donegal writes in 26 states and Peninsula is writing in nine of them.

“Our desire is to expand that business. We felt we would have a better base at the home office and we could do it more efficiently,” he said.

Donegal provides insurance in 26 states in the Mid-Atlantic, the Midwest, in the Southeast and Southwest regions of the country. It employs about 1,000 and writes close to $1 billion in direct premiums every year.