American Mutual Fire Closes Charleston, S.C. Office

The Charleston, S.C. office of American Mutual Fire Insurance Co. has closed its offices here due to efforts of its British parent, Royal & Sun Alliance Insurance to reduce losses in the United States. During its heyday, American Mutual had 500 employees, when it closed this week it had two employees in a 250-square-foot office.

Jimmy Lugs, once the company’s president and chairman, who stepped down from the board of directors in 1995, partially blamed the closure of the company on increasing property values, saying that only big conglomerates can handle such large claims.

Lugs’ father ran the company, and so did his grandfather, whom Lugs said was the insurer’s first employee.

Policyholders, mainly home and auto owners, will continue to receive coverage through the parent company. Only the Charleston office is disappearing.

American Mutual Fire Insurance Co. did not need a parent company for most of its existence, but the company suffered losses when Hurricane Hugo and its 135-mph winds came ashore north of Charleston in 1989.

To stay afloat, the insurer took $10 million from a Detroit company, Amerisure. The deal required it to convert from a mutual company, owned by its policyholders, to a firm that issues stock and is run by shareholders. The insurer never recovered.

The company changed names and management a couple of times. Eventually, half a dozen offices across the Southeast.

Topics South Carolina