Main Street America Acquires Grain Dealers

NU Online News Service, Dec.1, 3:40 p.m. EST

The Jacksonville, Fla.-based super-regional property and casualty insurance carrier did not disclose financial terms. It said the closing follows approval by the Indiana Department of Insurance and affirmation by policyholders of Grain Dealers Mutual at a special policyholders' meeting.

Tom Van Berkel, Main Street America's chairman, president and chief executive officer, said in a statement that the affiliation with Indianapolis-based Grain Dealers Mutual "is another key step in fulfilling Main Street America's long-term strategy of sustaining profitable growth while spreading risk and increasing scale through geographic diversification."

"This affiliation builds on our 86-year history of serving the 'Main Street' marketplace exclusively through the independent agency channel and will complement our existing relationships with all of our 1,500-plus agent-customers," Mr. Van Berkel said.

He added, "With Grain Dealers Mutual's strong, 107-year-old brand name and established network of independent agents, we envision great growth opportunities ahead. We will be working with Grain Dealers' president Don Malcom and his staff to enter two states that are new to Main Street America (Indiana and Mississippi) and grow market share in several other Grain Dealers states where Main Street America already writes business."

Grain Dealers said other benefits of the merger include the ability to pool its premium, losses and underwriting expenses with other Main Street America Group companies and it is anticipated the affiliation will result in Grain Dealers qualifying for the "A" (Excellent) rating by A. M. Best that is assigned to The Main Street America Group's pool.

Grain Dealers, it was explained, will gain access over time to Main Street America's products, technology and infrastructure.

The companies said Grain Dealers will maintain its brand name and continue to have binding authority. It will also continue to operate from its Indianapolis headquarters and its Greensboro, N.C., regional sales office.

Additionally, Main Street America will provide management oversight of Grain Dealers Mutual and its board of directors will replace Grain Dealers' board of directors.

Grain Dealers Mutual, founded in 1902, is a multiline regional property and casualty carrier that generated nearly $33 million in premium in 2008, the companies said.

Its product mix is 65 percent commercial lines, 35 percent personal lines.

Main Street America said the merger will give it a much larger Midwest presence. Last year, Main Street America entered the Midwest when it acquired Michigan-domiciled Great Lakes Casualty Insurance Company.

Over the past 18 months, Main Street America said it has expanded operations into six new states: Arizona, Michigan, Nevada, Oklahoma, Texas and Utah. With the addition of Indiana and Mississippi, the company will now write business in 24 states.

The companies said that Aon Benfield Securities Inc. was responsible for arranging the discussions that led to the transaction.

Main Street America Group operates five property and casualty insurance carriers: NGM Insurance Company, Old Dominion Insurance Company, Main Street America Assurance Company, MSA Insurance Company and Great Lakes Casualty Insurance Company.

The firm offers a wide range of commercial and personal insurance products and fidelity and surety bond products and said it has more than $800 million in premium written exclusively by 1,500-plus independent insurance agents.