MADISON, Wis. & JACKSONVILLE, Fla.–(BUSINESS WIRE)–May 4, 2018–Madison, Wisconsin-based American Family Insurance group and Florida-based The Main Street America Group will pursue a merger, the companies announced today.
Approved by the companies’ boards of directors, the merger will improve diversity of risk, promote growth through geographic expansion and provide agents and policyholders broader product offerings.
Both American Family Insurance and Main Street America are financially strong mutual holding companies, and the merger does not involve capital outlay by either. Both also have national distribution capabilities, but each with a regional emphasis. The merger, expected to close by year-end, will require approval by mutual policyholder-members of both companies and state insurance regulators.
“This merger will give policyholders – particularly small business owners – more insurance products to choose from and more ways to buy them,” said Jack Salzwedel, chairman and CEO of the American Family Insurance group. “Given our focus on policyholders and agents, that’s a win.”
“Both companies are able to immediately take advantage of our unique marketplace positions, as well as the ability to bring new value to each of our agency distribution systems,” said Tom Van Berkel, Main Street America’s chairman, president and CEO. “Our ability to sell new products through our independent agent-customers will help us and our agents profitably grow, while simultaneously bringing American Family enterprise products to a different policyholder base.”
Policyholder equity combined
The combined equity of the merged entities is expected to be more than $9 billion. Upon completion of the merger, Main Street America will operate as a stand-alone brand within American Family Insurance group, similar to The General and Homesite, acquired in 2012 and 2013, respectively. Main Street America will retain its affiliation and strong support of Trusted Choice ®, the global branding program of the Independent Insurance Agents & Brokers of America.
In 2017, the American Family group’s written premium was $8.8 billion. The company sells American Family-brand products, including auto, homeowners, life, business and farm/ranch insurance, primarily through exclusive agents in 19 states. American Family affiliates, The General, Homesite and AssureStart, also provide options nationally for consumers who want to buy and manage insurance over the internet or by phone.
Main Street America wrote more than $1 billion in premium last year. The company sells commercial and personal insurance as well as surety bonds, all through independent agents. Main Street America has an “A” (Excellent) rating with a stable outlook for financial strength from A.M. Best, the same as American Family.
American Family became a mutual holding company in 2017, making mergers like this possible.
The American Family Insurance group ended 2017 with approximately 11,300 full-time equivalent employees and Main Street America has approximately 900. At this time, no major employee or operational changes are expected as a result of the merger.
Read More …