Truck Insurance Exchange, a subsidiary of Farmers Insurance Group, has acquired the rights to access the renewals on Zurich North America Small Business Solutions' (SBS) $800 million book of business.
The Zurich book consists of business owner's policy for property, general liability and umbrella, as well as auto and workers' compensation. It is sold in 49 states and the District of Columbia.
As part of the transaction, current management of the book will transfer to Los Angeles-based Farmers Group Inc., according to statements released today by Farmers Group and Zurich.
Farmers is owned by its policyholders and managed by Zurich, headquartered in Zurich, Switzerland.
Truck Insurance Exchange is expected to begin exercising its right to access renewals on the book within 18-to-24 months after the transaction closes, Farmers said. Additionally, Zurich companies that underwrite the book will enter into a reinsurance arrangement with Truck Insurance Exchange whereby premium will continue to be written on Zurich paper but will be ceded to the exchange.
Farmers Small Business Insurance unit, which writes through the exchange, produced $1.6 billion in gross written premium in 2007, and this transaction will make Framers one of the top-five carriers in the U.S. small business market.
Mhayse Samalya, president of Farmers Small Business Insurance, said in a statement, "With this deal we are creating not only a distinctive organization with unique capabilities, but also a significant one with $2.4 billion in premium."
Mr. Samalya told NU Online that after the close of the transaction, SBS will eventually cease to exist and will become a part of Farmers. "The only differentiation will be…we have $1.6 billion of the business through exclusive agents, and now $800 million [the SBS book] will be through independent agents."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.