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Austin Mutual to Become Main Street America Affiliate

NU Online News Service, April 9, 12:47 p.m. EDT

The Main Street America Group says it has entered into an agreement to make Austin Mutual Insurance Co. an affiliate.

Terms were not disclosed and the deal still needs approval by regulators and Austin Mutual policyholders.

The deal is scheduled to close by midyear, says Main Street America, in a statement. Main Street America will provide Austin Mutual with quota-share reinsurance.

Austin Mutual will maintain its brand and continue to sell products through its network of independent agents.

Jeffrey Kusch, Austin Mutual’s chief executive officer, will continue to oversee the insurer while reporting to Tom Van Berkel, chairman, president and CEO of Main Street America.

Minneapolis-based Austin Mutual is a regional property-casualty insurer with direct premiums of more than $175 million. 

The 115-year-old insurer writes primarily in Minnesota, Arizona, Wisconsin, Washington, Oregon, Montana, South Dakota, Utah, and Idaho.

Jacksonville, Fla.-based Main Street America says it is a super-regional insurer that operates eight P&C carriers serving about 600,000 policyholders in 27 states.

The deal will “complement our existing relationships with 2,000-plus agent-customers,” says Van Berkel. An affiliation with Austin Mutual increases Main Street America’s scale through geographic diversification, Van Berkel adds.

Early in 2011, Austin Mutual also had geographic diversification on its mind when the company announced its merger with Cooperative Mutual Insurance Co. of Nebraska. Before merging, the insurers had an affiliation agreement.

Affiliation and mergers may become more common among smaller carriers after a catastrophe-laden 2011 and a tornado-filled start to 2012, according to industry analysts.

Because many small and regional insurers follow the mutual business model, they can only grow from within, without access to capital markets.

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