Fremont Michigan InsuraCorp, Northern Mutual Insurance Plan Alliance

Fremont Michigan InsuraCorp Inc., a Michigan-exclusive property and casualty insurance company headquartered in Fremont, Mich., and Northern Mutual Insurance Co. (Northern), a Michigan mutual insurer have agreed to a strategic alliance between the two insurers.

Northern intends to convert to a stock insurer and Fremont plans to acquire the stock of the converted insurer, according to an announcement released by the companies.

The terms of the proposed alliance are subject to Northern and Fremont entering into a mutually acceptable definitive agreement of the terms, including the consideration to be paid. In addition, the alliance is contingent upon the approval by the Commissioner of the Michigan Office of Financial and Insurance Regulation (OFIR).

A plan of conversion has not yet been filed with OFIR.

In 2009, Northern had net written premiums of $8.9 million and total assets of $23.7 million at Dec. 31, 2009, both on a statutory basis. Fremont had net written premiums of $55.6 million in 2009 and total assets of $89.4 million ($105.3 million on a GAAP basis) at December 31, 2009, on a statutory basis.

As previously reported, for the first quarter ended March 31, 2010, Fremont posted revenues of $14.9 million, up 9.4 percent compared to same quarter in 2009, and net income more than tripled, reflecting strength in premiums and the continued loyalty of agents and policyholders.

Fremont Michigan in late December rejected an unsolicited proposal from the Steak n Shake Company, now Biglari Holdings Inc., seeking to acquire control of the company.

Michigan Gov. Jennifer Granholm recently signed a narrowly tailored bill designed to protect Fremont Michigan from such a takeover. The legislation requires that a perceived hostile takeover of a small insurer be approved by two-thirds of the shareholders of the targeted company, rather than by a simple majority.

Topics Michigan