MetLife’s acquisition to move it into top 10 list

With the planned acquisition of about $1.2 billion in business from The St. Paul Cos. of Minnesota, Warwick-based MetLife Auto & Home insurance stands poised to break into the top 10 personal lines insurers nationally. MetLife Auto & Home agreed to acquire the personal insurance operations of the St. Paul, Minn., company in a $600 million cash transaction which includes purchasing the Eco-nomy Fire & Casualty Group, according to Joseph Madden, a MetLife spokesman.

In 1998 The St. Paul Cos., which is publicly traded on the New York Stock Exchange, generated about $1.2 billion in personal insurance premiums, which includes home, auto and boat insurance, according to a statement issued by the company. MetLife Auto & Home generated about $1.5 billion in personal insurance premiums that same year, which would give the merged businesses a grand total of $2.7 billion in written premiums, MetLife executives said.

”This acquisition is a major stepping stone toward meeting our aggressive goal to become a top 10 player in the industry, grow profitably with superior earnings and contribute to the success of MetLife,” said Catherine Rein, who took over as president and chief executive officer of the Auto & Home company in March. “It dramatically increases the strength and scale of MetLife Auto & Home.”

At least some of the 1,700 St. Paul Cos.’ workers, who focus on the personal lines business, will become MetLife employees as part of the deal. It is unclear yet exactly how many will be retained and whether they will be transferred to new offices.

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The deal will also help MetLife Auto & Home more than double its independent agency distribution network, bringing with it 3,000 independent agencies and brokers who represent The St. Paul Cos.

The sale is a strategic move for The St. Paul’s executives, who want to focus more on commercial lines of business, including property-liability insurance operations consisting of $4.5 billion in annual written premiums and its $1.1 billion in reinsurance premiums, company executives there said.

”This strategic action is designed to accelerate our progress toward becoming one of the preeminent commercial insurance companies in the worldwide marketplace by leveraging our greatest competitive advantage,” said Douglas W. Leatherdale, The St. Paul’s chairman and chief executive. MetLife Auto & Home is now the country’s 20th largest insurance company based on premiums written for the personal lines property and casualty industry.

When the purchase of The St. Paul Cos. business, which is ranked 19th, is completed sometime in late fall MetLife should move into 12th place, according to MetLife executives.

It could, however, move up a few more notches in the personal lines category if and when the Allstate Corp. completes its acquisition of the personal lines business of CNA Insurance Group in Chicago.

Allstate, which is based in Northbrook, Ill., announced plans to acquire CNA’s personal lines auto and homeowners insurance for $140 million in cash, which would increase Allstate’s total annual premium revenue from the independent agent channel to about $3 billion, company officials said.

Allstate is now the number two writer of both homeowners and auto insurance policies nationally, while CNA ranks 10th in auto insurance, according to the Insurance Information Institute’s 1999 Fact Book.

The deal is subject to approval by insurance regulators in Rhode Island, Minnesota and in some other states where the companies sell insurance polices.

In other insurance news, the merger of Allendale Mutual Insurance Co. of Johnston with Arkwright Mutual Insurance Co. of Waltham, Mass., and Protection Mutual Insurance Co. of Park Ridge, Ill., is complete. As of July 12 the companies became Factory Mutual Insurance Co.

Shivan Subramaniam, who formerly headed the Allendale company, is the president and chief executive of the merged company.

In the past company officials have said they expect the deal to bring about 100 new jobs to Johnston over the next two years.

 

 

 

 

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