Business Moves
Mercury General, Florida
Citing fourth quarter losses in Florida of $19 million, Mercury General said it would begin withdrawing from the state’s homeowners insurance market. The company will send the mandatory 180-day advance notice of its intent not to renew its 8,000 Florida policyholders beginning in March. It expects the withdrawal to be complete in the second half of 2012. The company said many of the losses related to sinkholes.
R-T Specialty, American E&S
Chicago-based R-T Specialty, the wholesale brokerage unit of Ryan Specialty Group, has agreed to purchase the wholesale insurance business of American E&S Insurance Brokers (AES) from Wells Fargo Insurance Services. R-T Specialty said it will acquire substantially all of the operating assets and related liabilities of AES, including eight office locations: San Francisco, Fresno and Irvine, Calif., as well as New York, Denver, Atlanta, Nashville and Seattle. R-T Specialty said it will also hire nearly all of the employees in those office locations.
Neal Aton, president and CEO of Wells Fargo Insurance Services, said the sale of its wholesaler allows the company to focus on its core retail operations.
Buckeye State, Middle Georgia
Buckeye State Mutual Insurance Co., a property and casualty insurer based in Piqua, Ohio, has agreed to affiliate with Middle Georgia Mutual Insurance Co. of Griffin, Ga. The closing is expected by March 31, 2011. Terry R. Gordy will continue as president of MGM and report to R. Douglas Haines, president and CEO of BSMIC.
Middle Georgia Mutual rote $6.7 million in direct premium in 2010. MGM sells in rural Georgia, aligning with Buckeye’s current rural exposure in the Midwestern states of Ohio, Indiana, Kansas, Iowa, Nebraska, South Dakota and Colorado.
Buckeye has 170 independent agents and reported written premiums of $62 million in 2010.
Bank of America, Balboa, QBE
Bank of America agreed to offload its Balboa insurance portfolio to Australia’s QBE Insurance for more than $700 million, the latest in a string of asset sales by the U.S. lender as it recovers from the global credit crisis. QBE will assume all of Balboa’s $1.2 billion in insurance liabilities in exchange for an equivalent amount of cash and other assets through a reinsurance transaction. QBE also entered into a 10-year distribution agreement with the bank for lender-placed insurance and real estate owned programs and certain voluntary consumer insurance products under the deal.