Business Moves

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R.E. Chaix & Associates, Katie Freeman Insurance Services

Irvine, Calif.-based R.E. Chaix & Associates Insurance Brokers Inc. has agreed to purchase Katie Freeman Insurance Services Inc. Neither companies’ clients will experience any change in the usual service, said Timothy Chaix, president of R.E. Chaix & Associates.

Katie Freeman began her insurance career more than 32 years ago in downtown Los Angeles with Walker & Co., later to become Gerald J. Sullivan & Associates. She acquired her wholesale expertise with Stewart Smith and others as she began specializing in professional liability. In 1993, Freeman opened her own business — Katie Freeman Insurance Services — which grew to a team of six employees and a book of business worth more than $4 million in premium.

Freeman and her team will remain in San Diego to service their book of professional liability business. In the Irvine, Calif., headquarters, Gloria McShane will continue to work her professional liability accounts with her clientele.

Additionally, Michelle Pelletier has been promoted to vice president and will be responsible for introducing R.E. Chaix’s Property & Casualty products to Katie Freeman’s book of business. Pelletier has more than 20 years of experience in the retail and wholesale brokerage industries, and has been with R.E. Chaix for the past three years.

Arthur J. Gallagher, AVRECO

Arthur J. Gallagher & Co. announced the acquisition of AVRECO, based in Chicago, from The Park Group Inc. Terms of the transaction were not disclosed.

Founded in 1962, AVRECO is a national managing general agent and wholesale insurance broker. William Yurek and his associates will continue to operate from their locations in Chicago and San Diego under the direction of Joel Cavaness, president of Risk Placement Services Inc., a subsidiary of Arthur J. Gallagher & Co.

Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm, is headquartered in Itasca, Ill.

QBE Americas, North Pointe

Australia’s QBE announced that it has signed a definitive agreement to acquire North Pointe Holdings Corp., a U.S.-based property and casualty insurance group. The acquisition is subject to the approval of regulatory authorities and North Pointe’s shareholders.

“North Pointe writes approximately $150 million of gross written premium in specialist markets involving owner-operated small and mid-sized restaurants, bars, taverns, small grocery and convenience stores, bowling centers, automobile repair facilities, artisan contractors, roller skating centers and forestry,” the announcement noted.

It distributes its products through a network of more than 1,900 independent and affiliated agents. QBE said it would pay $16 per share, for a total purchase price of $146 million, approximately 1.6 times estimated shareholders’ funds at Dec. 31, 2007. The acquisition will be funded from existing excess capital held in the United States.

President & CEO QBE the Americas, Tim Kenny commented: “The acquisition of North Pointe … increases our distribution through independent and affiliated agents.”

QBE’s Group CEO Frank O’Halloran added: QBE’s Group CEO Frank O’Halloran added: “the acquisition will meet QBE’s acquisition criteria including earnings per share accretion in year one. It will also enable us to achieve further synergies with our existing business. Subject to unforeseen circumstances, we anticipate a combined operating ratio in the low 90’s in 2009.”

Kenny also indicated that “the acquisition strengthens QBE’s position in the specialty insurance market in the United States.”

Business Alliance Insurance

A.M. Best Co. has downgraded the financial strength rating of San Bruno, Calif.-based Business Alliance Insurance from “B++” to “B,” following the bankruptcy filing of BAIC’s parent, National Farm Financial Corp. The analyst firm also removed the ratings from under review with negative implications and assigned a negative outlook.

NFFC filed for Chapter 11 bankruptcy protection in federal court on Dec. 5, 2007.

“The filing for protection is in response to an Oct. 4, 2007, legal judgement against BAIC, NFFC and the group’s principal controlling shareholder (all joint and several),” A.M. Best explained. “The judgement, which relates to an unsuccessful attempt by Public Service Mutual Holding Corp., an intermediate holding company, ultimately owned by Public Service Mutual Insurance Co., to acquire BAIC. The judgement calls for a large payment in damages to PSMHC. Should this judgement ultimately be enforced, it is likely that BAIC could become impaired and require the intervention of the California Department of Insurance,” A.M. Best said.

Clarendon National Insurance

Nearly four years after Russell Crowe dislocated his shoulder while training to portray boxer Jim Braddock in “Cinderella Man,” the injury is the cause of a $3 million court bout.

Clarendon National Insurance Co. filed suit against Omnikrom, the production company formerly known as Colder Than Jersey Productions, in Los Angeles Superior Court.

The suit aims at keeping the production company from claiming $3 million to cover the cost of compensating co-star Renee Zellweger because shooting took 14 weeks instead of seven weeks, thanks to Crowe’s injury. The $3 million was in addition to the $5 million Zellweger earned for the film, according to suit.

The insurance company claims it already paid almost $6 million in claims under the policy to cover the cost of Crowe’s surgery and rehabilitation, and other production delays, according to the suit.

The suit argues the production company did not file the claim until July 2005, at least five months after the balance of the insurance claims were paid, so the insurance company should not be required to cover the cost of Zellweger’s extra fee.

Calls to attorneys on both sides of the dispute were not immediately returned.