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Joining forces Liberty Mutual to acquire Ohio Casualty By Elisabeth Boone, CPCU As this issue of Rough Notes went to press, the Liberty Mutual Group announced a definitive agreement to acquire Ohio Casualty Corporation, the parent company of Ohio Casualty Insurance Company and five other property/casualty insurers. The deal is valued at approximately $2.7 billion. After the acquisition, which is expected to close in the third quarter of this year, Ohio Casualty will be part of Liberty Mutual’s Agency Markets business unit (see “The Best of Both Worlds” in the March 2007 issue of Rough Notes). Agency Markets encompasses eight regional property/casualty companies plus Employers Insurance of Wausau, Liberty Mutual Surety, and Summit Holdings Southeast, a Florida-based specialty workers compensation provider. In an interview with Gary Gregg, president of Liberty Mutual Agency Markets, Rough Notes asked him about the synergies he sees between the two organizations and how the combined entity will define itself in the marketplace. “We’re both very much focused on our agents,” Gregg said, “and I think there’s a great fit in terms of culture—not just with respect to agents but also in terms of our ongoing passion to deliver great products and services.” Overall, Gregg observed, “There’s a real good feel about the chemistry and the culture.” Gregg spoke enthusiastically about Ohio Casualty’s accomplishments on the technology front, particularly with respect to its PARISSM (Policy Administration, Rating and Issuance System) for commercial lines. “We’re really excited about the great strides Ohio Casualty has made in technology and the people behind that, and we’re looking forward to putting together a transition team with (Ohio Casualty President and Chief Executive Officer) Dan Carmichael and some of the other company presidents who are part of Agency Markets,” Gregg declared. Although he wasn’t able to comment on the composition of the top management team after the acquisition has been completed, Gregg did offer this remark: “The Ohio Casualty senior team is very much going to be part of the integration plan as we go forward.” In terms of market niches, “Ohio Casualty has a real strength in the market for artisan contractors,” Gregg noted. “That’s an area where we have a presence, and they bring some real expertise to the table.” The Liberty Mutual Group is represented by some 6,500 indepen-dent agencies nationwide, whereas Ohio Casualty has approximately 3,400 appointed agencies in its 48-state territory. Their combined net written premium of more than $7.3 billion will make Liberty Mutual “the largest regional provider of property and casualty products distributed through independent agents in the United States,” said Liberty Mutual CEO Edmund F. Kelly. Gregg added, “We’ve had an opportunity, using publicly available information, to look at the level of overlap between the two agency forces, and it’s not that significant. So this transaction adds depth to both Agency Markets and Ohio Casualty. They have quality relationships with their agents. They’ve done a terrific job of turning the company around. It’s a high quality book of business, and a high quality group of people.” As the acquisition moves forward, Gregg said, “We’re very comfortable that the deal will create tremendous value, not just for our two companies but also for our agents and their customers.” * |
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