Liberty Mutual Realigns Agency Companies to Welcome Ohio Casualty

August 27, 2007

Boston-based Liberty Mutual Group finalized its acquisition of Ohio Casualty Corp. on Friday, Aug. 24, 2007 and immediately announced a realignment of its $5.9 billion net premium regional agency company organization to make room for Ohio Casualty and its $1.4 billion in premium.

The insurer also made several executive appointments related to the expansion.

Liberty Mutual said the acquisition makes it the largest regional provider of property and casualty insurance distributed through independent agents in the country.

The boards of directors of both companies, Ohio Casualty’s shareholders, and the departments of insurance for the states of Ohio and Indiana had previously approved the transaction.

Ohio Casualty Corp. is the holding company of The Ohio Casualty Insurance Co. and five other property and casualty insurance companies, which are referred to under the marketing brand Ohio Casualty Group. Policies are underwritten by The Ohio Casualty Insurance Co., West American Insurance Co., American Fire and Casualty Co., Ohio Security Insurance Co., Avomark Insurance Co. or Ohio Casualty of New Jersey, Inc.

Based on 2006 results compiled by A.M. Best Co., with the addition of Ohio Casualty, Liberty Mutual Agency Markets’ $7.3 billion in net written premium makes it the largest regional provider of property and casualty products distributed through independent agents in the United States. Last year Liberty Mutual Agency Markets’ net written premium was $5.9 billion and Ohio Casualty’s was $1.4 billion. Liberty Mutual Group’s consolidated net written premium in 2006 was $20.6 billion.

The 11 companies in Liberty Mutual Agency Markets have more than 6,800 employees and approximately 6,500 appointed agencies. Ohio Casualty, which has approximately 2,100 employees and operations in 48 states, has approximately 3,400 appointed agencies.

Ohio Casualty will join Liberty Mutual Group’s Agency Markets business unit, which consists of 11 regional property and casualty and specialty insurance companies that distribute through independent agents and brokers. Ohio Casualty will operate in Delaware, Kentucky, Maryland, Ohio, Pennsylvania, Virginia, Washington, D.C., and West Virginia.

“The addition of Ohio Casualty enhances the scale and geographic diversification of our Agency Markets business unit while strengthening the overall Liberty Mutual Group,” said Edmund F. Kelly, Liberty Mutual Group chairman, president and chief executive officer, in a statement. “This is an excellent fit for us and further demonstrates our commitment to independent agents and their customers.”

“We are today a stronger family of regional and specialty companies that remains committed to local decision-making, strong agency relationships and ease of doing business that have made us the company of choice for independent agents; and we add Ohio Casualty’s talented and dedicated employees across the country to our already strong team,” said Gary Gregg, president of Liberty Mutual Agency Markets.

Gregg said the acquisition of Ohio Casualty would immediately result in a realignment of geographic regions covered by Agency Markets companies.

Hawkeye-Security Insurance operations will be split between America First Insurance and Indiana Insurance. Headquartered in Des Moines, Iowa, Hawkeye-Security Insurance sold personal lines in Iowa, Kansas, Missouri, and Wisconsin and commercial insurance in Iowa, Kansas, Minnesota, Missouri, Nebraska, and Wisconsin.

The realignment of its agency companies has produced the following territorial assignments:

America First Insurance – Arkansas, Kansas, Louisiana, Missouri, Oklahoma and Texas

Indiana Insurance – Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin

Montgomery Insurance – Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee

Ohio Casualty – Delaware, Kentucky, Maryland, Ohio, Pennsylvania, Virginia, Washington, D.C., and West Virginia

Peerless Insurance – Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont

Its additional agency companies — Colorado Casualty, Golden Eagle Insurance and Liberty Northwest — will continue to operate in their current territories, which are: Colorado Casualty – Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming; Golden Eagle Insurance – California; and Liberty Northwest – Alaska, Idaho, Montana, Oregon and Washington.

Dan Carmichael, president and chief executive of Ohio Casualty, will stay on with Liberty Mutual Agency Markets as an executive consultant to Gregg, and will help with implementation of the acquisition, business development efforts, technology and other areas, according to the company.

Along with the regional structural changes, the company also made several executive appointments.

David Lancaster has been named president and chief executive officer of Indiana Insurance, and Michael Winner has been named president and chief executive officer of Ohio Casualty.

Gregg said the specialty lines operations of Liberty Mutual Agency Markets and Ohio Casualty will be combined into the Specialty Products Group that will include Surety, Fidelity Bonds, Excess Casualty and Umbrella. John Busby, who has been named senior vice president and chief operating officer, Specialty Products Group, will lead this group.

In addition to the eight regional companies and the Specialty Products Group, Liberty Mutual Agency Markets includes two operating companies: Wausau Insurance Companies, a national commercial property and casualty insurer; and, Summit Holding Southeast, Inc., a mono-line workers compensation insurer covering Florida and nine Southeastern states.

Liberty Mutual Group, as of Dec. 31, 2006, had $85.5 billion in consolidated assets, $74.6 billion in consolidated liabilities, and $23.5 billion in annual consolidated revenue.

Source: Liberty Mutual Group
www.libertymutual.com

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