American Financial Group, Inc. has reached an agreement to acquire Summit Holdings Southeast, Inc and its related companies from Liberty Mutual Insurance for $250 million.
AFG says Summit, a workers’ compensation insurer based in Lakeland, FL, will continue to operate under the Summit brand as a member of AFG’s Great American Insurance Group.
AFG’s says its total capital investment in Summit will be approximately $400 million, inclusive of a capital contribution by AFG at closing, which is expected to occur “in the first or second quarter of 2014, following customary regulatory approvals.”
Carl H. Lindner III, co-CEO of AFG, says, “Summit has an excellent long-term track record of underwriting outperformance. We value its underwriting discipline, talented management team and value-based service model. Their business model fits well with our P&C Group’s strategic focus and complements our Great American Insurance Group specialty workers’ compensation offerings available through our other specialty P&C businesses. We look forward to welcoming Carol Sipe, Summit Group’s president and CEO, and her team to the AFG family.”
A.M. Best, commenting on the acquisition, says the bbb+ issuer credit rating and all debt ratings of AFG, as well as the A financial strength rating and a ICRs of of Summit’s insurance subsidiaries—Bridgefield Employers Insurance Company and Bridgefield Casualty Insurance Company—are all unchanged. A.M. Best says, “The transaction has no effect on AFG’s financial leverage measures as no external financing is utilized.”