Midland Co. Announces American Modern to Cease Commercial Liability

The Midland Company, a highly focused provider of specialty insurance products and services, announced that American Modern Insurance Group, its insurance subsidiary, will cease offering the commercial liability coverages associated with its manufactured housing park and dealership programs. The commercial liability programs represented some 3.4 percent of American Modern’s total gross premiums in the first half of 2001.

The Midland Company derives approximately 94 percent of its consolidated revenues from its American Modern Insurance Group subsidiary. American Modern, a leader in the manufactured housing insurance market, offers a variety of specialty insurance products and fee-generating services through diverse distribution channels.

According to John W. Hayden, Midland president and CEO, American Modern has offered commercial liability and physical damage coverages to manufactured housing parks and dealerships for 10 years. Despite the company’s best efforts, the liability portion of this business, which accounted for approximately $20.0 million in gross written premiums in 2000 and $10.2 million in the first six months of 2001, has continued to produce bottom-line losses. More recently, we have observed an escalating deterioration in these results. After careful evaluation of its importance to American Modern’s overall strategy, management has decided to cease offering the commercial liability portion of these programs. American Modern will continue to offer property coverages to these markets.

Hayden added that the company will continue to serve the overall needs of the manufactured housing industry, but will do so with products and services that add value — both for business partners and for shareholders. According to Hayden, this particular product line did not enhance the company’s core growth and profitability strategies.