Summit Insurance Sells Health Business to Medical Mutual of Ohio

Summit Insurance Company has signed a definitive agreement to sell its health insurance business to Medical Mutual of Ohio, it announced this week.

The agreement, to take effect May 1, 2006, means the transfer of Summit’s approximately 900 groups representing 20,000 members to Medical Mutual subsidiary Consumers Life Insurance Company.

“Summit employees and the entire UVMC family should be very proud of the company it has built,” said Ron Musilli, president of Summit Insurance Company. “We successfully carved a niche for ourselves in a highly competitive, highly regulated industry.”

He stressed that the decision to sell the assets of Summit came at the optimum time, given the increasingly expensive, highly volatile insurance environment.

“The insurance marketplace has changed dramatically in the last 14 years since Summit began. Much larger multi-line health insurers now exist, offering efficiencies and advantages that a single-line insurance company like Summit just can’t match. However, over the years, Summit has played an important role for businesses throughout the region,” Musilli added.

“Southwest Ohio is a very important market for us,” said Kent Clapp, Medical Mutual chairman, president and CEO. “We’ve been building membership in the area, and this agreement is going to give us even more traction in the marketplace.”

Clapp added that the transfer of business to Consumers Life will be a smooth transition with continuity of service and comparable benefits for Summit’s customers.

Musilli noted that the boards of directors of Summit Group Holding Company and UVMC (sole shareholder of Summit Group Holding Company) last year initiated evaluation of Summit’s strategic financial alternatives, including potential sale.

“The board members took a critical step to capitalize on Summit’s value in the marketplace and assure continued affordable insurance coverage for Summit customers,” he commented.

Summit Insurance Company was created by the UVMC healthcare system as a wholly owned subsidiary in 1992 to fill a void in the group insurance marketplace for small and mid-sized companies seeking affordable, comprehensive health insurance for their employees. Since then, Summit has grown to serve businesses not only in Miami County, but throughout the state of Ohio.

Founded in 1934, Medical Mutual of Ohio identifies itself as the oldest and largest health insurance company based in Ohio. The company serves its customers through high-quality, affordable group and personal health insurance plans, and third- party administrative services to self-insured group customers. Based in Cleveland, Medical Mutual also has offices in Columbus, Cincinnati, Toledo, Akron, Dayton and Youngstown. For more information, visit the company’s Web site at MedMutual.com.

Source: Medical Mutual of Ohio

Topics Mergers & Acquisitions Carriers Ohio