The Palisades Group, based in Berkeley Heights New Jersey, announced that it has agreed to acquire The Prudential Property and Casualty Insurance Company of New Jersey (PRUPAC-NJ), the New Jersey property and casualty unit of Prudential Financial, Inc. The acquisition is part of Pru’s decision to exit the P/C business. It has agreed to sell the majority of its P/C units to Liberty Mutual (See article in today’s “National” News).
“The transaction is valued at approximately $260 million, including return of capital of about $230 million and cash and a note from the purchaser,” said Palisades’ bulletin. The company is already one of the state’s leading writers of auto insurance, and the acquisition of PRUPAC-NJ, which has an 8 percent share of New Jersey’s auto insurance market and a 10 percent share of the state’s homeowners market, will substantially increase Palisades’ market strength.
The company indicated it would operate its new acquisition “as a separate New Jersey-based company with its own management team and employees and an exclusive distribution agreement with Prudential.” It also said that the necessary “regulatory filings will be completed shortly and submitted to the New Jersey Department of Banking and Insurance.”
As a NJ-based company, Palisades is more cognizant than most of the turmoil in the state’s auto insurance market. It took pains to reassure co,sumers that the transaction would “help ensure stability and continuity in New Jersey’s insurance market,” adding that the DOBI’s approval of the deal would not result “in changes to PRUPAC-NJ policyholders’ rates, coverages, and policies, and consumers will continue to have the same degree of access to auto and homeowners insurance in New Jersey.”
Palisades said it had agreed to “extend employment offers to most of the current PRUPAC-NJ employees, as well as many other PRUPAC Corporate employees, preserving hundreds of New Jersey jobs.” It also revealed a strategic partnership with Homesite, a leading homeowners insurance provider, providing for it to “write new homeowners insurance policies through Prudential agents under an exclusive distribution agreement with Prudential.”
The company assured policyholders that “Current PRUPAC-NJ homeowners insurance policies will continue to be maintained and renewed by Palisades’ newly acquired company.”
Commenting on the acquisition of PRUPAC-NJ, Palisades Group President and CEO Gerald Wilson stated: “This is a significant step forward for the Palisades Group, its customers, agents, and employees. We are acquiring a well-managed and successful business, and in return we’ll help maintain stability in New Jersey’s dynamic insurance market by preserving hundreds of thousands of existing auto and homeowner insurance policies. We are also ensuring availability of coverage by maintaining an expansive network of agents across New Jersey, where Palisades and PRUPAC-NJ customers can continue doing business with the same trusted agents they’ve always known. Additionally, we are excited to be establishing our relationship with Homesite, an existing affinity partner of Prudential in 16 states across the nation. Most importantly, we are keeping jobs right here in the Garden State. This is a winning proposition for everyone touched by this transaction.”
Hal Belodoff, a co-founder and Chairman of the Palisades Group, called the acquisition “a great day for Palisades.” He noted that since the company’s founding in 1992 it had been dedicated to providing “high quality insurance coverage to safety-conscious New Jersey drivers at an affordable cost with superior customer service and a special relationship with agents who placed their trust with us.”
Wilson commented that he was “very encouraged by the commitment of the McGreevy administration and the Commissioner to a stable auto insurance market in New Jersey, making us even more confident in increasing our investment in the state.” (See IJ Website May 19)
“We have achieved tremendous growth in only ten years,” Wilson continued, “Our employees and our more than 130 agents across New Jersey are the foundation of this company, and we are proud to expand our family today with the addition of knowledgeable and hardworking employees and agents from PRUPAC-NJ.”
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