Donegal Group Buys Peninsula Insurance

NU Online News Service, Jan. 8, 11:43 a.m.EST?Donegal Group Inc. announced it has completedpurchasing all outstanding stock of the Peninsula Insurance Companyand Peninsula Indemnity Company from Folksamerica Holding CompanyInc. for $23 million.[@@]

Folksamerica, based in New York, is a subsidiary of OneBeaconInsurance Group in Boston.

Peninsula is the second acquisition Donegal Group has completedthis year. Earlier this week, the Marietta, Pa.-based Donegal saidit had completed buying all outstanding stock of Le Mars MutualInsurance Company of Iowa for $12.5 million following theconversion of Le Mars to a stock insurance company.

Peninsula operates as a multiple-line carrier, primarily inMaryland, Delaware and Virginia. Personal lines coverages representa majority of premiums written for Peninsula, with the balancecoming from mercantile and service businesses, Donegal Group noted.Peninsula's largest line of business is private passenger autoliability and physical damage; other principal lines includehomeowners and commercial multi-peril.

Donald Nikolaus, chief executive officer at Donegal Group, saidthis deal is part of his company's ongoing strategy for selectiveacquisitions of property- casualty insurers, to augment Donegal'sorganic growth in existing markets and expand into new geographicregions.

"We believe the Peninsula acquisition will enhance our marketposition and agency representation in the Mid-Atlantic states whileenabling us to leverage certain expenses over a greater premiumbase and consolidate various reinsurance costs in the future," Mr.Nikolaus said.

Donegal Group Inc. offers various personal, farm and commercialproperty-casualty insurance, in about 15 Eastern states. Thecompany's personal insurance products offerings range from auto andboat policies to homeowners and fire coverage. Its commercialinsurance products include business owners, multi-peril andworkers' compensation policies.