Liberty Mutual Group said it completed its $6.2 billion acquisition of Safeco Corporation today and has restructured its Agency Markets business unit in light of the deal.
The company said Michael Hughes, executive vice president, Insurance Operations at Safeco, will replace Paula R. Reynolds as president of Safeco Insurance.
Mr. Hughes will also become executive vice president, Agency Markets. Ms. Reynolds, who also held the positions of chairperson and chief executive officer of Safeco, will be leaving the organization after a transition period.
Liberty Mutual said its Agency Markets business unit consists of national and regional property and casualty and specialty insurance companies that distribute personal, commercial and surety products and services through independent agents and brokers.
Operating under the Safeco brand, the new personal lines organization will have $4.9 billion in direct written premium, with $3.6 billion from Safeco and $1.3 billion from Liberty Mutual Agency Markets’ eight regional companies.
The company said personal lines products will be sold in the eight regions that correspond with Liberty Mutual’s existing regional companies. Gary Gregg, president of Liberty Mutual Agency Markets, said the strategy of going to market regionally but having a national brand and platform will help independent agents compete in the marketplace against some of the large direct writers.
The commercial lines organization, Regional Companies Group, will operate under Liberty Mutual’s eight regional company brands and will now have $5.7 billion in direct written premium, with $3.8 billion from the Liberty Mutual regional companies and $1.9 billion from Safeco based on 2007 results.
The new surety operation, Liberty Mutual Surety, will have $773 million in combined direct written premium based on 2007 results, Liberty Mutual said. Timothy Mkolajewski, senior vice president of Safeco Surety, has been appointed as president of Liberty Mutual Surety and executive vice president, Agency Markets, and will lead the operation.
Summit, Liberty Mutual Agency Markets’ specialty workers’ compensation company, will continue to operate in its 10-state Southeastern footprint.
With the addition of Safeco, Liberty Mutual Group becomes the fifth-largest property and casualty insurer in the U.S.