New England P&C Insurer To Join The Motorists Insurance Group
COLUMBUS, Ohio (April 27, 2009) – Phenix Mutual Fire Insurance Co., Concord, N.H., will become an affiliate of The Motorists Insurance Group, rated A (Excellent) by A.M. Best, subject to approval by New Hampshire and Ohio insurance regulators and Phenix Mutual policyholders.
The announcement was made by John J. Bishop, CPCU, CLU, chairman, president and CEO, at the annual policyholders meeting of Motorists Mutual Insurance Company, the lead organization of The Motorists Insurance Group.
The 123-year-old property and casualty insurer operates in New Hampshire, Maine, Vermont, Massachusetts, Rhode Island and South Carolina. At year-end 2008, the company posted $26.5 million in direct and assumed written premium. Phenix Mutual utilized the advisory services of Philo Smith & Co. to explore capital strengthening alternatives.
"This affiliation will be an excellent fit for both Phenix Mutual and our group of companies. Phenix Mutual's associates share our group's values, management philosophy and believe strongly in the independent agency system," Bishop said.
Bishop added that 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.
"Also, an affiliation of this nature, which is similar to others previously completed by our group, creates a greater spread of risk and should afford a winning business opportunity that will benefit policyholders, agents and associates of both organizations," he said.
If the affiliation is approved, Phenix Mutual will pool its premium, losses and underwriting expenses with other companies in the group. In addition, it is anticipated that Phenix Mutual will share the group’s A.M. Best rating.
Bishop indicated that he anticipated no loss of jobs as a result of the affiliation. "I expect there will be additional job growth opportunities for both organizations as Phenix Mutual expands its product offerings," Bishop said. "Our prior experience has shown our affiliation model provides the resources that contribute to new employment opportunities."
Motorists' results hit by storms, stock market decline
The Motorists Insurance Group's commitment to stewardship of its policyholders' premium dollars and conservative investment philosophy helped the group of companies weather one of the most difficult years in memory for the insurance industry, Bishop also told meeting attendees.
Motorists Mutual, the lead company of The Motorists Insurance Group, faced historic challenges during 2008, including the Sept. 14 windstorm that resulted in the greatest single loss in company history. The group of companies in total faced 19 designated catastrophic weather events. Despite the pressures, the group of companies increased business writings and continued to look for areas of expansion, such as Motorists Mutual’s expansion into the Michigan commercial lines market.
"Our policyholders can be confident that our group of companies will be there for them now and well into the future," Bishop said. "We have built a solid financial foundation with a conservative investment philosophy. Throughout these difficult conditions we have met all of our financial commitments, and we remain well positioned to meet our policyholder obligations.
"We are blessed to enjoy a long-term, excellent financial posture with no debt, including our various real estate holdings across the country," he added.
The Motorists Insurance Group reported $641.7 million in net written premium, $541.3 million in policyholder security funds and a combined ratio of 107.4 percent at year-end 2008. The group has almost $1.5 billion in assets.
The group's net written premiums increased by $20.2 million or 3.2 percent in 2008. This compared favorably with the property/casualty industry, where net written premium declined by $6 billion or 1.4 percent last year.
Motorists Mutual, which operates in Ohio, Pennsylvania, West Virginia, Kentucky, Michigan and Indiana, posted $474.2 million in net written premium and a 107.5-percent combined ratio. The company's personal lines net written premium encountered pressure in a market dominated by increasing competition and companies seeking markets less volatile than those in coastal regions. This was offset in part by strong new business sales in commercial lines. Policyholder security funds were affected by the downturn in the economy as well as significant storm losses, registering $409.3 million.
"Our companies have responded to market challenges and have continued to increase new business writings, but we expect greater pressures in 2009. The dramatic new home and automobile sales slowdown, along with growing pressure on businesses’ budgets will limit growth opportunities among property and casualty insurers," Bishop said.
The Motorists Insurance Group's company-by-company results
Motorists Life Insurance Company, which sells its products in 16 states, had premiums and contract considerations of $46 million. Assets were more than $334 million. The company also passed the $6 billion mark for life insurance in-force, and its affiliate, Broad Street Brokerage continued to grow profitably in 2008.
MICO Insurance Company saw net written premiums of $5.2 million and generated a combined ratio of 89.8 percent. The company had $14.9 million in policyholder security funds at year-end.
Wilson Mutual Insurance Company, which operates in Wisconsin and Minnesota, grew its net written premium to $19.1 million. The company’s policyholder security funds stood at $15.8 million at year-end, and posted a combined ratio of 107.5 percent.
Iowa Mutual Insurance Company and its subsidiary, Iowa American Insurance Company, grew personal and commercial lines in 2008. The companies, operating in Iowa, Nebraska and Illinois, posted $25.5 million in net written premium, $26.8 million in policyholder security funds and a 107.5-percent combined ratio.
American Hardware Mutual Insurance Company, with corporate offices in Minnetonka, Minn., reported $117.7 million in net written premium and a 107.6-percent combined ratio. American Hardware also reported $102.3 million in policyholder security funds.
Motorists Board of Directors
Re-elected to three-year terms on the Board of Directors were Susan E. Haack, assistant secretary; Archie M. Griffin, president and CEO, Ohio State Alumni Association, Inc.; Robert C. Smith, president and CEO, Spero-Smith Investment Advisers, Inc.
Cameron E. Williams Scholarship won by Defiance College student
Eric Stolly has been selected as the fourth recipient of the Cameron E. Williams Scholarship and was recognized at the meeting.
Stolly is a junior at Defiance College and maintains a 3.43 GPA. He is the son of Mark and Alba Stolly, of the Stolly Insurance Group in Lima, Ohio.
The Cameron E. Williams Memorial Scholarship Fund was established on Jan. 1, 2005, in honor of Motorists' former chairman, president and CEO with funds contributed by the family of Mr. Williams and The Motorists Insurance Group. The Griffith Foundation for Insurance Education administers the $2,000 annual scholarship for full-time students who are pursuing a degree related to the insurance industry.
About Motorists Mutual Insurance Company
It is the lead company in The Motorists Insurance Group based in Columbus, Ohio. The group is composed of nine property and casualty, life and brokerage companies that operate in 38 states. At year-end 2008, the group of companies had $641.7 million in net written premium and $541.3 million in policyholder security funds.
Motorists Mutual Insurance Co. was established in 1928. It is a major regional insurer that writes property and casualty lines of business. Motorists' products are sold by a network of more than 4,000 independent agents in a market of more than 46 million people.
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