Farm Bureau Mutual Insurance Company announced that the Farm Bureau property-casualty affiliates in Kansas (Farm Bureau Mutual Insurance Company, Inc.) and Nebraska (Farm Bureau Insurance Company of Nebraska) will merge into Farm Bureau Mutual Insurance Company. The Farm Bureau Mutual property- casualty pool currently operates predominantly in Iowa, Minnesota, South Dakota, Utah, Arizona and New Mexico.
These three mutual companies have signed a memorandum of understanding to merge operations and are working toward finalizing a definitive agreement. This merger is contingent upon regulatory approval and is expected to close during the first quarter of 2003.
“Our policyholders will benefit from improved rate stability as we achieve greater geographic diversification by moving from a one-state to an eight-state environment,” John Tatum, executive vice president and general manager of Farm Bureau Insurance Company of Nebraska, said. “We recognize that smaller companies operating in a single state will face serious challenges in the future. In addition to the geographically limited ability to expand our premium bases, we are susceptible to violent weather patterns that often turn into catastrophic insurance loss events.”
“By joining our companies together, we lock in a consistent commitment to our traditional rural base, while at the same time creating new flexibility and strength to reach an increasingly urban population,” Michael Wilds, executive vice president and CEO of Farm Bureau Mutual Insurance Company, Inc. of Kansas. “In addition, there will be no overlapping marketing territory as a result of this transaction, almost unheard of in the business merger world.”
The mission of the new company is to become the property-casualty insurance company of choice within its eight-state marketing territory.
Farm Bureau Mutual to Maintain Presence in Manhattan, Kansas and Lincoln, Nebraska. Farm Bureau Mutual plans to preserve a presence in the current home offices in Manhattan, Kansas and Lincoln, Nebraska. These offices will transition to regional offices of Farm Bureau Mutual with sales support, underwriting, claims and other functions. In addition, the Manhattan Regional Office will become the center for the underwriting and administration of Farm Bureau Mutual’s commercial property-casualty operations and Farm Bureau Mutual’s call center will be located in the Lincoln Regional Office.
The 615 employees of the Farm Bureau property-casualty affiliates in Kansas and Nebraska will become employees of FBL Financial Group, which will manage the combined company pursuant to a management agreement. As is the practice with its current employees, FBL will be reimbursed for the cost of providing services to Farm Bureau Mutual.
The combined written premium of the three companies is expected to exceed $650 million, and the number of Farm Bureau Mutual insurance policies in force will be in excess of 1.3 million.
Topics Carriers Agribusiness Property Kansas Property Casualty Casualty
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