Prudential Completes P-C Business Sale

By Michael Ha

NU Online News Service, Nov. 5, 12:30 p.m. EST?Prudential Financial Inc., the country's largest life insurer, has completed the sale of its auto and homeowners insurance operations to Liberty Mutual Insurance Company and Palisades Group.

The transaction, according to Newark, N.J.-based Prudential, was part of the company's effort to improve its profitability and focus on its life insurance and financial services units.

"This completed transaction is in line with our strategy to focus on businesses that grow and protect clients' assets and to be a marketplace leader in life insurance and investment businesses," Laurita Warner, Prudential spokesperson, told National Underwriter.

The transaction, she explained, also helped free up more capital from property and casualty insurance businesses for other opportunities for Prudential.

Ms. Warner said her company is still looking to divest Merastar, Prudential's last remaining p-c unit, which consists of personal lines business that the company sells to affinity markets. "We are continuing to look for a buyer. Merastar's still up for sale," she said.

Under the just-completed deal, the Berkeley Heights, N.J.-based Palisades Group bought Prudential Property and Casualty Insurance Company of New Jersey for $260 million, while the Boston-based Liberty Mutual acquired Prudential's p-c operations in 48 other states as well as in Washington, D.C., for around $550 million.

According to figures from Oldwick, N.J.-based A.M. Best Inc. and Prudential's annual financial filings, Prudential's nationwide p-c operations posted $1.57 billion in net written premiums last year, while its New Jersey business had $512 million in 2002 net written premiums.

Commenting on its completed acquisition, Liberty Mutual said it will now begin the process of integrating into its operations Prudential's $1.1 billion of auto and homeowners business--including more than 1,500 Prudential p-c employees.

The Boston-based insurer said it also began a distribution agreement with more than 3,000 eligible Prudential Financial sales agents, allowing them to offer Liberty Mutual auto and homeowners insurance to their customers while continuing to sell Prudential life insurance and financial services products.

J. Paul Condrin, executive vice president of Liberty Mutual's personal market, noted that the transaction moves his company up to the eighth largest personal-lines insurer in the country.

"This furthers Liberty Mutual's growth strategy in a consolidating personal insurance marketplace, and this acquisition adds nearly 25 percent to our personal lines business?enhancing our expense advantage, maintaining competitive pricing for our customers and providing new opportunities for our employees," Mr. Condrin said.

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Prudential Completes P-C Business Sale

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