Los Angeles-based the Farmers Insurance Group of Companies is buying American International Group’s (AIG) Personal Auto Group, which includes 21st Century Insurance Co. The acquisition price is $1.9 billion.
Under the agreement, 21st Century Insurance Group, the wholly owned subsidiaries comprising AIG’s U.S. personal auto insurance business, will be sold to Farmers Group Inc., a subsidiary of Zurich Financial Services Group. Farmers Group Inc. will sell the underlying insurance entities to the Farmers Exchanges, which Farmers Group Inc. manages, but does not own.
The transaction excludes AIG’s Private Client Group, which sells insurance to high net worth individuals.
FGI will pay AIG $1.5 billion in cash and $400 million in face amount of subordinated, euro-denominated capital notes backed by Zurich Insurance Co. FGI will also assume 21st Century’s outstanding debt of $100 million.
The acquisition is expected to close no later than the third quarter of 2009.
This acquisition by the Farmers Exchanges will position Farmers as the third-largest overall, personal lines insurer in the U.S. and as the largest auto insurer in several states, including California.
21st Century, which includes the former AIG Direct business and Agency Auto business, operates in 49 states and Washington, D.C. 21st Century has more than 2.4 million customers and insures more than 4 million vehicles across the country. 21st Century is the third largest traditional direct writer of insurance in the United States.
Bliss & Glennon, Fortegra
Jacksonville, Fla.-based Fortegra Financial Corp., an insurance services company specializing in affinity marketing, payment protection, mass marketing and administration, completed the acquisition of insurance broker Bliss & Glennon Inc., from Willis HRH Inc. The financial terms of the transaction were not released.
Joe Plumeri, chairman and CEO, Willis Group Holdings, said Willis sold the unit because it did not fit with his firm’s focus on retail brokerage. Bliss & Glennon is a surplus lines general insurance agency with binding authority.
Fortegra Financial, formerly Life of the South, was founded in 1982 as a credit insurer and has since expanded into other insurance services and products. Fortegra serves clients in the banking, credit union, consumer finance, automotive, retail, credit card, and vacation ownership industries. This transaction positions Fortegra to expand into wholesale brokerage.
Fortegra President and CEO Richard S. Kahlbaugh said the firm has been looking for opportunities and it plans to enter new geographic markets and product segments. Fortegra Financial completed a recapitalization with Summit Partners in June 2007.
Chubb, Southern Florida
Chubb Personal Insurance has notified its Florida agents it is no longer including wind coverage in Masterpiece homeowners insurance policies for new customers in 14 Southeast and Southwest coastal counties in the state. The insurer, however, is making wind coverage available on new business in these counties on a non-admitted basis through its Chubb Custom Insurance Co. (CCIC).
According to a recent letter sent to agents, the new approach went into effect April 15 in Broward, Hillsborough, Miami-Dade, Sarasota, Charlotte, Indian River, Monroe, St. Lucie, Collier, Manatee, Palm Beach, Lee, Martin and Pinellas counties. Chubb will continue to offer new customers in these counties “ex-wind Masterpiece homeowners coverage,” according to the letter.
For new business in these counties that was approved and bound before April 15, Chubb said it would honor the quotes when issued within 30 days of the date first bound.
The change only affects new business in the 14 southern coastal counties; Chubb is continuing to write wind coverage on new business in all other counties in the state.
Agents can access the non-admitted CCIC wind coverage through The St. James Insurance Group in Orlando, which is a Chubb approved program manager.
A Chubb spokesman declined comment.
Was this article valuable?
Here are more articles you may enjoy.