Few Job Cuts Foreseen In Farmers Deal

Following the announcement that Farmers Group Inc. had purchased 21st Century Insurance for $1.9 billion earlier this month, Farmers' chief executive suggested that major job cuts are not in the cards for the new acquisition.

F. Robert Woudstra noted that only a week before the deal was announced, 21st Century's parent, American International Group, which arranged the sale with Farmer's parent, Zurich Financial Services, had been “reducing the headcount by 500 people.”

Concerning management of the new acquisition, he said Anthony J. DeSantis, 21st Century president and CEO, “will continue to run it for us.”

He said that 21st Century as a monoline auto insurer brings 1.5 million customers into his enterprise, and Farmers as a multiline insurer offering auto, home, life, motorcycle, business and recreation insurance, looks forward to cross selling.

With the merger, Mr. Woudstra said Farmers, with more than $17 billion in annual written premiums, will be the third-largest U.S. personal lines writer.

In the overall auto market, he said they are in a dead heat for third with GEICO and Progressive.

He said the company plans to continue using the 21st Century Insurance brand for direct auto insurance marketing.

On the personnel size question, he also said that the call centers would be evaluated. Regarding areas for consolidation, he said the company would “look at what support functions there might be,” but he noted that for 21st Century “a lot of that was supplied by AIG corporate.”

With AIG in financial difficulties, Mr. Woudstra said that 21st Century employees were excited about becoming part of a company that would provide “stability on a daily basis.”