Farmers Given Green Light to Acquire Zurich’s SBS Lines |
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Written by U. S. Insurance News
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Monday, 23 June 2008 |
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The regulators have given the green light to Farmers Insurance Group®.
All regulatory approvals have been given for Truck Insurance Exchange,
one of the Farmers Exchanges, to acquire the rights to access renewals
on Zurich North America Commercial’s Small Business Solutions (SBS)
book of business.
In addition, the management of the SBS book of business will transfer to Farmers Group, Inc.
“We are pleased that we can now go forward with the integration of Farmers Business Insurance and Zurich Small Business Solutions,” said Paul N. Hopkins, CEO of Farmers Group. “It will enhance the depth and breadth of products available to customers, create an enhanced distribution capability that competes even more effectively in both the exclusive agent and independent agent channels, and will benefit our entire organization.”
The SBS book consists of four primary lines of business: business owner’s policy for property, general liability and umbrella, commercial auto, and workers’ compensation. It is sold in 49 states plus the District of Columbia.
Although the management of the SBS book will shift to Farmers right away, the full transition of the business to Farmers Business Insurance will take about 18 to 24 months. Meanwhile, Zurich companies that underwrite the SBS book and Truck Insurance Exchange will enter into a reinsurance arrangement, through which SBS premium will continue to be written on its current paper but fully ceded to the Exchange.
In 2007, Farmers Small Business Insurance unit produced $1.6 billion in gross written premium. This transaction will make the Exchange one of the top five carriers in the U.S. small business market. The SBS book is estimated at approximately $700 million.
To better serve the thousands of independent agents who offer SBS products, Farmers has appointed Carl N. Hackling as the new leader of the small commercial business distributed through independent agents. Hackling will be field-based and will immediately assume all responsibility for the distribution and underwriting of this business.
Farmers Group, Inc. is a wholly owned subsidiary of Zurich Financial Services.
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