It's well understood in the business world that there are twobasic ways to grow: buy or build. Given the flurry of merger andacquisition activity in 2015, many insurance companies seemed tothink that buying was the way to go. It's too early to tell whetherM&As will be a trend for 2016 as well, but one company hasjoined the group of buyers.

Connecticut-based Hartford Financial Services GroupInc. announced today that it has chosen to grow byacquisition and has agreed to purchase Northern Homelands Co., theholding company of Alpharetta, Ga.-based Maxum SpecialtyInsurance Group, for $170 million in cash.

“Today's acquisition supports The Hartford's strategy toprofitably grow our business by investing in the product,underwriting and distribution capabilities that are making us abroader and deeper risk player,” said Doug Elliot, Hartford'spresident. “The addition of Maxum, a well-respected excess andsurplus lines company, accelerates our efforts to build upon ourmarket-leading position in Small Commercial by expanding ourproduct offerings and capabilities.”

Maintaining Maxum's brand identity

The plan is for Maxum to maintain its brand and limitedwholesale distribution model and to be managed as a separate unitwithin Hartford's Small Commercial business. In addition, all Maxumemployees will be offered continued employment at the close of thetransaction, and Maxum will remain headquartered in suburbanAtlanta.

“We are pleased to join an iconic company with a proven abilityto adapt and redefine itself to remain relevant to customers anddistribution partners,” said Maxum CEO Marshall Turner. “We believethat as part of The Hartford we will have a stronger valueproposition and greater opportunities to expand our products andmarket position. I would like to thank our customers and colleaguesfor the hard work and dedication that has allowed us to create aquality excess and surplus lines platform that is poised forcontinued success.”

The transaction, which will not have a material impact onHartford's financial results, according to a prepared statement, isexpected to close in the third quarter, subject to obtainingregulatory approvals and other customary closing conditions.

More detail about the transaction can be found on Hartford'sinvestorrelations website.

Related: 10 trends to affect insurance markets

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