Two East Coast-based mutual insurance companies have formed a mutual alliance that they say allows them to achieve efficiencies, diversification and spread of risk without actually merging their companies.
The Norfolk & Dedham Group and the Rockingham Group said that unlike a traditional merger, their mutual alliance is an “innovative model of how mutual insurance companies can benefit from shared resources while maintaining company autonomy and identity.”
The geographic diversity of the two insurers’ customer base enables the organization to spread risk to mitigate the impact of large losses like those associated with weather- related catastrophes. They also hope to create a stronger organization by streamlining business processes, although they said no staff reductions are planned.
Headquartered in Dedham, Massachusetts, The Norfolk & Dedham Group consists of Norfolk & Dedham Mutual Fire Insurance Co., Dorchester Mutual Insurance Co., and Fitchburg Mutual Insurance Co.
With offices in Dedham, Mass. and Bridgewater, New Jersey, the company provides personal and commercial insurance to 120,000 policyholders through more than 300 independent agents in Massachusetts, Maine, New Hampshire, New Jersey, New York, and Rhode Island.
Headquartered in Harrisonburg, Virginia, the Rockingham Group consists of Rockingham Mutual Insurance Co., Rockingham Casualty Co., and Rockingham Mutual Service Agency, Inc. It writes personal and small business insurance products for more than 50,000 policyholders through 100 insurance agencies in Virginia and Pennsylvania.
While the Alliance will provide an opportunity for both organizations to work together, they will maintain independent boards of directors and the companies will continue to be regulated by their respective states of Massachusetts and Virginia.
The insurers said policyholders will benefit from a stronger, more vital organization that is better positioned to withstand losses and maintain its financial integrity. They promised to introduce new products and services and retain and attract the most talented workforce.
“Our Alliance demonstrates how two mutual insurance organizations with long-standing traditions can demonstrate farsighted thinking in preparing themselves to prosper in a more competitive and changing business environment,” said Timothy Hegarty, president and CEO of The Norfolk & Dedham Group.
“For far too long many mutual insurance companies have not recognized and adapted as quickly and effectively as they should have to changing market conditions,” added Neal Menefee, president and chief executive officer of the Rockingham Group. “Those companies that not only understand, but also take action to deal with the dramatic changes occurring in the business, will be in a better position to take care of their customers’ future needs.”
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