Alleghany Corp. will sell off workers compensation carrier Pacific Compensation Insurance Company (PacificComp) to a rival for $150 million in cash.
Arizona-based CopperPoint Mutual Insurance Company said its planned PacificComp acquisition will close at the end of 2017, pending the usual closing conditions and regulatory review/approvals.
As part of the deal, an Alleghany subsidiary will still provide adverse development reinsurance cover on PacificComp’s pre-acquisition claims.
CopperPoint said it is pursuing the acquisition as part of a larger goal to expand regionally and grow. The combined entity will have an underwriting book of business worth $400 million in premium and a combined asset base of nearly $4.1 billion, with $1.5 billion in policyholder surplus. (The sale is being handled through Allegheny’s wholly-owned subsidiary Alleghany Insurance Holdings LLC,)
“We are creating a family of insurance companies built on strong business relationships and best-in-class service,” Marc Schmittlein, president and CEO of CopperPoint, said in prepared remarks. “PacificComp bring experienced professionals with deep California market expertise and a solid book of business that will undoubtedly provide us with a sound platform for growth.”
CopperPoint said that its launch of commercial lines to its workers compensation customers in Arizona also opens up new opportunities to bring new products and services to the California market, thanks to the pending M&A deal with PacificComp.
Jan Frank, CEO of PacificComp, said that CopperPoint gives her company “an ideal strategic and cultural fit for our employees, broker partners and policyholders that will allow us to continue our service to the market without interruption” and also give it a way to expand both products and services.
Once the deal closes, PacificComp will continue with its current name, as part of the broader CopperPoint family of companies.
CopperPoint was privatized and converted to a mutual insurance company in 2013, with a goal of geographic expansion and product diversification. Schmittlein came on as CEO in 2016, with a mission to help grow the company into a “regional mutual commercial lines company,” according to the deal announcement.
CopperPoint, around since 1925, provides comprehensive workers compensation insurance coverage. PacificComp offers similar coverage, but exclusively through independent insurance brokers for California companies.
Source: CopperPoint, Alleghany Corp./PacificComp