The 33-state insurance market built by State Auto Financial is being sold to Liberty Mutual for $2.3 billion. The deal is approved by the State Auto board and is expected to close in 2022. State Auto panel counsel law firms will want to take note.
Liberty Mutual, already the fifth largest P&C insurer based on A.M. Best data, will benefit by expanding its personal and small commercial insurance lines with the addition of State Auto. Liberty Mutual already serves this market through its Safeco brand. State Auto, which ranks #49 in the top 100 P&C carriers, brings a network of 3,400 independent agencies to the deal. Liberty Mutual recently reorganized its panel counsel management structure, and this acquisition presents another potential for major change for interested defense law firms.
About State Auto
State Auto Insurance Group employs approximately 2,000 associates and markets its products through more than 3,000 independent agencies in 33 states. State Auto has assets of $4.6 billion and writes $2.0 billion in premium as of mid-2020. Corporate headquarters is in Columbus, Ohio, where State Auto was founded in 1921. Regional headquarters are located in Austin, TX; Bloomington, MN; Carmel, IN; Columbus, OH; Goodlettsville, TN; and Hunt Valley, MD.
Insurance protection is offered for businesses, homes, autos, farms, and boats. Business insurance includes but is not limited to, premises liability, employment practices liability (EPLI), products liability, business auto, workers’ compensation, and cyber liability.
The top producing states for State Auto Insurance Company are Texas, Ohio, Kentucky, Michigan, South Carolina, Arkansas, Minnesota, Tennessee, Mississippi, Maryland, Illinois, Indiana, Missouri, North Carolina, and Pennsylvania.
State Auto offers industry-specific coverage options for a range of industries, including food, metals, wineries, construction contractors, distribution, wholesale, hospitality, manufacturing, real estate, restaurants, retail, and services.
The contracting industry covers residential and commercial lines of finish carpentry, electrical, plumbing and HVAC, flooring, tile, painting/wall covering, glass, masonry, framing, excavation, drywall and insulation, and commercial building construction.
State Auto Financial Corporation is a holding company with the following consolidated subsidiaries as listed in the 2021 10-K:
- State Auto Property & Casualty Insurance Company
- Milbank Insurance Company
- State Auto Insurance Company of Ohio
- Stateco Financial Services, Inc.
Additionally, “mutual pooled companies” of State Auto include:
- American Compensation Insurance Company
- Bloomington Compensation Insurance Company
- Meridian Security Insurance Company
- Patrons Mutual Insurance Company of Connecticut
- Plaza Insurance Company
- Rockhill Insurance Company
- State Auto Insurance Company of Wisconsin
State Auto company exited its excess and surplus (E&S) lines specialty business in 2018. The specialty insurance segment consisted of E&S property, E&S casualty, and programs.
What Does the Acquisition Mean for State Auto Panel Counsel Members?
Insurance defense law firms that are State Auto panel counsel members, as well as Liberty Mutual panel counsel members, will want to stay close to their panel counsel contacts at to monitor news of the merger and any consolidation plans.
Streamlining operations is an objective in most mergers, which translates into the integration of similar support functions. As mentioned, Liberty Mutual recently reorganized its panel counsel management team, moving from a regional management approach to a consolidated national function. In similar M&A situations, most large carriers ultimately merge the litigation panels of acquired companies into the parent company.
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This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. The article should not be used as a substitute for legal advice from a licensed attorney in your state. Every situation is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.