Response Buys Two AFG Units
NU Online News Service, Jan. 27, 4:04 p.m. EST?American Financial Group Inc., a Cincinnati-based insurance holding company, said today its insurance subsidiary, Great American Insurance Co., will sell its Worldwide Insurance Co. and Worldwide Direct Auto Insurance Co. to Response Insurance Group.
In the deal, Great American will be paid $17 million, plus an amount equal to the policyholders' surplus of the Worldwide companies being sold.
The two Worldwide companies currently represent some 70 percent, or approximately $80 million, of AFG's overall personal auto insurance premiums written on a direct basis, the company said.
Additionally, Response Insurance Group–which is part of Direct Response Corporation, a group of direct-to-customer insurance companies headquartered in Meriden, Conn.–will buy Great American's right to renew some of its personal automobile insurance business written on a direct basis in selected markets.
Response will also pay commissions to Great American based on the successful renewal by Response companies of Great American policies written on a direct basis. AFG does not expect to report a significant gain or loss on the sale, the company stated.
"The sale of the direct auto business represents another step in clarifying our position as a specialty commercial writer within the property and casualty insurance industry," said Carl H. Lindner III, co-president and head of p-c group at AFG, in a statement.
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