Indianapolis-based Grain Dealers Mutual Insurance Co., one of the largest property-casualty insurers in the state, will
become part of The Main Street America Group, the Jacksonville, Fla.-based company said this morning.
Financial terms of the transaction were not disclosed. The agreement has been approved by directors of both firms and is awaiting approval from the Indiana Department of Insurance, which is expected in October.
Don Malcom, president and CEO of Grain Dealers Mutual, will continue to oversee the company’s operations from its Indianapolis headquarters on Corporate Drive near West 62nd Street.
Further, the company will retain its name and continue to sell insurance policies under the Grain Dealers Mutual name.
Malcom could not be reached for comment this morning. But, in a prepared statement, he said: “We will be affiliating with a financially strong organization that is 100 percent committed to the independent agency system,” he said. “This will greatly benefit our network of independent agents and our policyholders.”
The Indianapolis insurer was founded in 1902 and for many years was located at 1752 N. Meridian St. It sold the building to local accounting firm London Witte Group last August. Grain Dealers Mutual also has an office in Greensboro, N.C., which it will continue to maintain.
Grain Dealers Mutual had assets in 2007 of $57.4 million, ranking it as the 10th-largest property-casualty insurer in the state, according to the most recent statistics provided to IBJ. It wrote nearly $33 million in premiums last year, the company said.
The company provides coverage in nine states, with Indiana, Mississippi, North Carolina and Oklahoma accounting for its largest volume of business. As of 2007, the company employed 83 people, including 59 in Indiana, according to IBJ statistics.
Two-thirds of its business is commercial and a third is in personal lines. Commercial multi-peril, homeowners and private passenger auto account for the majority of the company’s lines of business.
However, the company has struggled financially in recent months. In March, rating firm A.M. Best Co. downgraded Grain Dealers Mutual’s financial strength rating to B (Fair) from B+ (Good) and the issuer credit rating to “bb” from “bbb-.” The outlook for both ratings is negative, A.M. Best said.
The rating actions reflect the company’s “deteriorated capital position, its history of volatile operating performance, uncertainty regarding its future pension liability and its ongoing exposure to weather-related losses,” A.M. Best said.
Under the new affiliation, Grain Dealers Mutual should be able to share Main Street America Group’s A rating, which ensures policyholders of the firm's claims-paying ability, a Main Street America spokesman said.
Tom Van Berkel, Main Street president and CEO, said in a prepared statement that Grain Dealers Mutual is a good fit for his company.
“Grain Dealers Mutual has a strong brand and serves a market niche that is similar to Main Street America’s,” he said.
Founded in 1923, The Main Street America Group operates five property-casualty insurance carriers in 24 states: NGM Insurance Co., Old Dominion Insurance Co., Main Street America Assurance Co., MSA Insurance Co. and Great Lakes Casualty Insurance Co.
It wrote $800 million in premiums last year and insures more than 600,000 policyholders.