American Family Insurance finalizes acquisition of direct property insurer, Homesite Group
Madison, Wis. (Jan. 2, 2014) - Direct property insurer Homesite Group Incorporated is now part of American Family Mutual Insurance Company, Madison, Wis.-based American Family announced today. The acquisition agreement, announced last September, officially closed on Dec. 31 following regulatory approval from domicile states of Homesite and its subsidiaries.
Boston-based Homesite is a direct writer of homeowners, renters and condominium insurance. By adding direct channel options to serve a different customer segment, American Family Insurance is complementing the strong exclusive agent network that will remain the company's primary distribution channel.
"American Family agents are the best in the business and remain the key to our future success," said Jack Salzwedel, American Family chairman and chief executive officer. "At the same time, there's another customer segment that strongly prefers direct channels. We will meet the needs of those customers, also."
Adding Homesite to the American Family group of companies also spreads American Family's homeowners insurance catastrophe risk beyond its primary Midwest concentration, an important element of preserving financial strength. Homesite serves customers in 46 states and the District of Columbia.
Second expansion in a year
The Homesite purchase, at an approximate price of $660 million, comes one year after American Family acquired non-standard auto insurer The General.
Homesite was privately owned by multiple entities and individuals. Owners included Alleghany Corporation, Metalmark Capital through its management of the Morgan Stanley Capital Partners funds and The Plymouth Rock Company, Inc.
Homesite is a leader in direct-to-consumer homeowners, renters and condominium insurance, using the internet, call centers and technology-enabled platform solutions. Founded in 1997, its sales primarily occur through alliances with other insurers and financial services companies.
Founded in 1927, mutual insurer American Family offers multiline insurance products and annuities through its 3,500 exclusive agents, with some sales through its internet and call centers. American Family operates in 19 states, while its subsidiary The General conducts business in 27 states.
Continuation of Homesite's momentum
Homesite's leadership team, headed by CEO Fabian Fondriest, remains in place, and the company will continue to operate as a separate entity.
"Homesite's transition to American Family Insurance creates tremendous potential for the next stage of our development," Fondriest said. "Our business philosophies align well, and American Family brings the financial strength to support even stronger profitable growth and success."
"Homesite works in partnership with a variety of insurance companies and financial institutions, and those relationships will continue," Fondriest said. "Joining forces with American Family Insurance provides the resources to enhance our platform and infrastructure, and we'll also benefit from the strong association with a leader in the property and casualty insurance field."
KPMG Corporate Finance LLC served as financial advisor and Foley & Lardner as legal advisor to American Family. Lazard Fréres & Co. served as financial advisor and Willkie Farr & Gallagher as legal advisor to Homesite.
More on American Family:
American Family Insurance offers auto, homeowners, life, commercial and farm/ranch insurance. American Family is the nation's third-largest mutual property/casualty insurance company and ranks 393rd on the Fortune 500 list.
As of Sept. 30, American Family reported assets of $18.3 billion and equity of $6.3 billion. The company employs 7,800 people, and sells its products through 3,500 exclusive independent contractor agents. Web: www.amfam.com; Facebook: www.facebook.com/amfam; Twitter: www.twitter.com/amfam.
More on Homesite:
Homesite Group offers homeowners, renters and condominium insurance. As of Sept. 30, Homesite reported assets of $920 million and equity of $330 million. The company employs 700 people and is headquartered in Boston, Mass. The company has offices in Akron, Ohio, and Phoenix, Ariz., as well as sales and claim staff located throughout the country. Web: www.homesite.com; Facebook: www.facebook.com/homesiteinsurance; Twitter: www.twitter.com/homesite
News media contacts:
American Family Insurance
Media Relations Manager
(608) 242-4100, ext. 32121
American Family Insurance
Media Relations Director
(608) 242-4100, ext. 30680