Business Moves
Wells Fargo Insurance Services, North Coast Surety
Wells Fargo Insurance Services Inc., part of Wells Fargo & Co., acquired the assets of North Coast Surety Insurance Services and North Coast Surety Technologies. Terms were not disclosed.
North Coast Surety Insurance Services based in Novato, Calif., has provided surety bonds for public works contractors since 1994. Dixon Wright, who owned the company, now manages surety operations for Wells Fargo Insurance Services in the San Francisco Bay Region. He reports to Brian Hetherington, regional manager for Wells Fargo Insurance Services in the San Francisco/South Bay region.
USG Insurance Services
USG Insurance Services Inc, a national wholesale broker of commercial insurance, is expanding operations with a new office in Irvine, Calif. The creation of the new southern California office is the first of several in USG’s plan to expand on the West Coast. The California branch will be piloted by Mike Foley, who specializes in mid- to large-sized brokerage accounts.
Foley, now president of USG Insurance Services of California, has more than 20 years of commercial wholesale experience operating with several national brokerages. USG is seeking talent to develop its West Coast business and has 11 offices nationwide.
Hartford Financial Services Group
Hartford Financial Services Group Inc. is trying to sell its property/casualty insurance business, as it reels from massive losses, according to Reuters. Hartford has retained Goldman Sachs, which has been calling potential bidders for the property/casualty business, Reuters sources said.
Possible contenders for the business could include German insurer Allianz, which is already an investor, MetLife, Munich Re and Travelers. It was not clear whether those companies had been approached.
Hartford’s P/C business is worth about $8 billion on paper, based on the company’s financial statements filed with regulators, according to a February note issued by Citigroup Analyst Joshua Shanker. But getting that price could be difficult because capital and loan markets have been difficult to tap, reducing the capacity of bidders to pay. An insurer such as Travelers, with a market capitalization of about $23 billion, could have trouble raising enough debt and equity to pay for a deal, a source said.
Allianz made a $2.5 billion investment in Hartford last October, giving it a stake, and the ability to raise its ownership in future. Allianz also could be better situated to pay for the business, a source said. However, Sabia Schwarzer, a spokeswoman for Allianz of America, said the “investment in the Hartford is purely financial, not strategic.” She declined to comment further.
Goldman spokeswoman Andrea Rachman declined to comment, as did Travelers, MetLife and Munich Re. Hartford could not immediately be reached for comment.
The development comes amid large losses for the 199-year-old company. Hartford, a large writer of a popular retirement product called variable annuities, has been badly battered by investment losses and higher costs from guarantees on the annuities, which are linked to stock market performance.
The company had a net loss of $2.75 billion in 2008, reversing a net profit of $2.95 billion the previous year. Hartford’s shares are down some 40 percent so far this year.
Phenix Mutual,
The Motorists Insurance Group
Concord, N.H.-based Phenix Mutual Fire Insurance Co. will become an affiliate of The Motorists Insurance Group, pending approval by regulators in New Hampshire and Ohio, where Motorists is headquartered.
Phenix operates in New Hampshire, Maine, Vermont, Massachusetts, Rhode Island and South Carolina and had $26.5 million in direct and assumed written premium last year.
As part of the agreement, Phenix will pool its premium, losses and underwriting expenses with other companies in the group.
“The affiliation will enable us to maintain a high level of service to policyholders and agents, offer our agency force new products and give the company access to financial and other critical resources through The Motorists Insurance Group,” said Rolf H. Gesen, Phenix president and CEO.
John J. Bishop, chairman, president and CEO of Motorists, said Phenix Mutual has enjoyed a “long-term market presence with a loyal agency force in its operating states, most of which represent new markets and significant future growth opportunities for The Motorists Insurance Group.”