MISS. FARM BUREAU MUTUAL INSURANCE DISSOLVING

Jackson-based Mississippi Farm Bureau Mutual Insurance has an-nounced that the strain of paying $450 million in claims after Hurricane Katrina has caused the company to cease writing policies in the state and transfer current policies to the Southern Farm Bureau Casualty Co. In early December, 240,000 policyholders were offered the chance to switch their insurance to Southern Farm Bureau Casualty.

According to David Waide, MFB president, all policyholders’ interests will be protected while the mutual is dissolved in 18 to 24 months. Waide said customers will be able to continue their coverage from all their policies. The change will have no affect on the company’s 350 employees.

Private insurance claims for Katrina have reached $3.6 billion in Mississippi. About $1.3 billion of that is in the coastal Harrison, Jackson and Hancock counties.

Mississippi Farm Bureau, the second-largest insurer behind State Farm, has paid 730,000 claims.

“We intend to maintain that market share even after Katrina,” Waide told the Jackson Clarion-Ledger.

Mississippi Insurance Commissioner George Dale said larger multi-state firms have more customers to absorb the impact of Katrina. He said the company’s largest loss before Katrina was $30 million from Hurricane Georges in 1998.

“This is a (Jackson) Mississippi-based company,” Dale said. “The pressure on them is they do not have premiums in other states.”

The Farm Bureau owns both mutual insurance and casualty insurance companies. The difference between the two is in financial structure.

The mutual insurance company, founded in 1952, was owned by policyholders, while the casualty company, founded in 1987, is privately held.

Topics Agribusiness Mississippi