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Grain Dealers finalizes affiliation with Florida firm

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Indianapolis-based Grain Dealers Mutual Insurance Co., one of the largest property-casualty insurers in the state, has closed on a deal to became part of The Main Street America Group, the Jacksonville, Fla.-based company said Tuesday morning.

Financial terms of the transaction, which was first announced in July, were not disclosed. The agreement has been approved by directors of both firms and recently received the consent of the Indiana Department of Insurance. Department of Insurance Chief Financial Examiner Connie Ridinger said no money changed hands between the companies.

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.
 
It will, however, give up management oversight to Main Street America, and its board of directors will be replaced by Main Street directors.

Grain Dealers Mutual’s financial struggles in recent months prompted the affiliation. In March, rating firm A.M. Best Co. downgraded its financial strength rating to B (Fair) from B+ (Good) and the issuer credit rating to “bb” from “bbb-.” 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.

Grain Dealers Mutual also should benefit by pooling its premium, losses and underwriting expenses with other Main Street America companies, the two insurers said.

“Our affiliation with 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,” Tom Van Berkel, Main Street America’s president and CEO, said in a written statement.

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 in August 2008. 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 statistics provided to IBJ. It wrote nearly $33 million in premiums in 2008, 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.

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.

 

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

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