Vermont’s insurance regulator has scheduled a public hearing for September 9 to weigh the proposed acquisition of Union Mutual Fire Insurance Co. by the Massachusetts-based mutual insurer Norfolk & Dedham Group.
Under the proposal that was filed in April, Norfolk & Dedham Group (N&D) would acquire Union Mutual and its wholly owned subsidiary, New England Guaranty Insurance Co., Inc., both based in Montpelier.
If approved by the Vermont Department of Financial Regulation (DFR), the Vermont property/casualty insurers would join Norfolk & Dedham Mutual Fire Insurance Co., Fitchburg Mutual Insurance Co. and Dorchester Mutual Insurance Co., the current members of N&D Group.
The affiliation would result in a new board of directors, with eight directors being associated with N&D and four with Union Mutual. Joel Murray will remain president and CEO of N&D and Lisa Keysar will remain president and CEO of Union Mutual. Murray will serve as board chairman of the combined group.
The combined group will write personal and commercial lines business in eight states with approximately $596 million in direct written premium and over $580 million in policyholder surplus. The group will have approximately 250 employees and 600 independent agents with 1,000 agency offices across the Northeast.
After the acquisition, the property/casualty insurers will participate in an intercompany pooling agreement effective Jan. 1, 2025, under which premiums, losses and expenses will be combined and pro-rated, with participation percentages based on the individual members’ policyholder surplus.
Each company will continue to market products under its existing brands in their respective marketplaces. After closing, the parties will also decide on a new group name for the affiliated organization.
Community Mutual Insurance Co., a commercial lines affiliate of Union Mutual based in Latham, New York, is not part of the restructuring. According to the Vermont DFR, Community Mutual currently cedes 100% of its net premiums to Union Mutual through a reinsurance contract, and that contract is not expected to change.
The members of the N&D Group share underwriting and claims operations, and own the Newbury Corp., a subsidiary that provides management services. As part of the affiliation, Union Mutual will purchase an ownership interest in Newbury, and all employees will become employees of Newbury.
N&D has said it will maintain its headquarters in Dedham, Massachusetts, while Union Mutual will keep its headquarters in Montpelier, Vermont.
According to the proposal, there are no plans for any staff reductions or layoffs, and the companies promise to “use their best efforts to maintain compensation and benefits for all employees and staff subject to rate changes, availability and market conditions generally.”
N&D Group’s direct written premium reached an all-time high of $368 million in 2023. Its policyholder surplus stands at $459 million, also a record high. N&D sells private passenger automobile, homeowners, commercial automobile, commercial multi-peril, and workers’ compensation policies, in Massachusetts, New Jersey and New Hampshire presently, with the bulk of its of business in Massachusetts
The Union Mutual companies write about $228 million in direct premium annually. Union Mutual is licensed in Vermont, New Hampshire, Maine, Connecticut, Massachusetts, Rhode Island and New York. Its subsidiary New England Guaranty Insurance Co. is licensed in Vermont, New Hampshire, Maine, Connecticut, Massachusetts, Rhode Island and New York.
The companies are rated A (Excellent) with a stable outlook by AM Best.
According to the proposal, “all parties believe that combining their strengths will provide substantial benefits to the members of both organizations and materially enhance the product offerings and services available to all members.”
As this is a mutual insurer affiliation, there is no purchase price or consideration payable to the insurers.
September 9 is the last day for public comment on the transaction.
Topics Mergers & Acquisitions Vermont
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