The agreement, which has been approved by the boards of directors of both companies, is subject to regulatory approval from the State of Indiana Department of Insurance, which is projected for early fourth quarter 2009. Financial terms of the transaction were not disclosed.
“Our affiliation with Grain Dealers Mutual will complement our 86 years of successfully serving our ‘Main Street’ independent agent-customers and their customers (policyholders),” said Tom Van Berkel, chairman, president and chief executive officer of Main Street America. “It will help us achieve our long-term strategy of sustained profitable growth by spreading risk and increasing scale through geographic diversification.”
Van Berkel added, “Grain Dealers Mutual has a strong brand and serves a market niche that is similar to Main Street America’s. They are a good cultural fit for us.”
Grain Dealers Mutual, based in Indianapolis, Ind., is a 107-year-old multi-line carrier that currently provides coverage in nine states, with its largest volume of business in North Carolina, Oklahoma, Mississippi and Indiana. In 2008, Grain Dealers Mutual generated nearly $33 million in direct written premium. Its product mix is 65 percent commercial, 35 percent personal. The company’s predominant line of business is commercial multi-peril, followed by homeowners and private passenger auto.
With the affiliation, Main Street America will be entering some new states, as well as increasing its presence in several existing states.
Grain Dealers Mutual president and chief executive officer Don Malcom will continue to oversee the company’s daily operations out of its Indianapolis headquarters. Grain Dealers Mutual will also maintain its regional service office in Greensboro, N.C.
“We will be affiliating with a financially strong organization that is 100 percent committed to the independent agency system,” Malcom said. “This will greatly benefit our network of independent agents and our policyholders.”
- Ohio Department of Insurance Director Mary Jo Hudson announced that the average rates for the state’s top 10 private passenger auto insurers increased 0.8 percent in 2008. The average rates for the state’s top 10 homeowners increased by 6.9 percent in 2008.
Ohio has the 13th lowest auto insurance and 6th lowest homeowners insurance average premiums in the country, according to the most recent figures from the National Association of Insurance Commissioners (NAIC).
Auto insurance rates were unchanged overall for State Farm, whereas the other top 10 writers implemented slight overall increases (0-3 percent). Homeowner insurers implemented larger overall rate increases than have been seen in the previous four years (-.5 to 13.1 percent).
Based on the rate activity thus far and industry data, Department analysts expect the 2009 rate activity to continue similarly as it did in 2008. For auto insurance, the average rates will likely increase slightly. For homeowners insurance, the average rates will likely increase.
Changes in auto insurance rates are associated with medical costs, weather-related claims, the number of cars on Ohio roads and repair costs, while changes in homeowners insurance rates can be attributed to building and material costs and weather-related claims.