NU Online News Service, Dec. 4, 10:15 a.m. EST
OneBeacon Insurance Group said it has sold the renewal rights to its non-specialty commercial lines business to The Hanover Insurance Group Inc.
The Canton, Mass.-based insurer said the transaction includes small commercial accounts and the non-specialty portion of the middle-market business, beginning with a Jan. 1, 2010 effective date. Direct premiums for the affected book total approximately $490 million.
OneBeacon said it will receive more than $23 million plus 10 percent for premiums renewed above $200 million.
The insurer said specialty and personal lines are not affected. Additionally, the company said it will keep its technology, financial services, excess property and property inland marine commercial segments.
Mike Miller, OneBeacon's chief executive officer, said in a statement, "This step clearly demonstrates OneBeacon's principal focus as a specialty insurance company, with roughly $1 billion–or two-thirds–of our premium derived from specialty lines going forward. The capital freed up from the highly competitive commercial markets enhances our financial flexibility as we continue to grow our specialty businesses."
Mr. Miller continued, "Through The Hanover, we have identified a partner committed to building its commercial lines capabilities. We are pleased that they will be offering jobs to many of our talented commercial lines employees."
He said both organizations are committed to ensuring a seamless transition process for agents and policyholders. "OneBeacon will continue to service its in-force book of business and related claims," he noted.
A.M. Best said the rating of Hanover Insurance ["A" (Excellent)] would be unaffected by the deal, noting that many agents writing busienss in this line with OneBeacon have relationships with Hanover.
This story was updated Dec. 7 at 11:57 a.m. EST
© 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.