The Hartford Insurance Group (HIG) has completed its acquisition of Maxum Specialty Insurance Group for $168 million in cash. The transaction, announced in March, closed on July 29.
Maxum will maintain its brand and limited wholesale distribution model and will be managed as a separate unit within The Hartford’s Small Commercial business. Maxum will remain headquartered in Alpharetta, Georgia and maintain its regional offices in Chicago and Philadelphia.
“We’re excited to complete the acquisition of Maxum which builds upon our commitment to be a deeper and broader risk player,” said The Hartford President Doug Elliot. “Maxum’s excess and surplus coverage allows us to provide more solutions for our distribution partners and their customers. We’re pleased to welcome the talented employees of Maxum into The Hartford family.”
Senior analyst Jay Sarzen, a member of Aite Group’s insurance team has called the acquisition a “smart move” for The Hartford.
“Given the highly fragmented nature of the P/C world, there is a limit for HIG or any other carrier to finding growth in highly-penetrated industry classes, especially in small commercial. For many carriers such as HIG, growing will mean having to go broader,” said Sarzen.
Maxum wrote only $157 million in premium last year while The Hartford’s small commercial unit writes about $3 billion on an annual basis; however The Hartford’s distribution network of 10,000 agencies gives it an opportunity to grow this business line beyond the $157 million in premium, the Aite Group analyst said.
Maxum Specialty Insurance Group, founded in 2003, is comprised of Maxum Indemnity Co. and Maxum Casualty Insurance Co. Maxum Indemnity is an authorized non-admitted excess and surplus lines insurer in 49 states; the District of Columbia; and the territories of Puerto Rico and the U.S. Virgin Islands. Maxum Casualty is an approved admitted carrier in 50 states and the District of Columbia. Both companies are domiciled in Delaware.
For 2015, Maxum reported a combined ratio of 95.5, improved from 105.4 in 2014.
Its biggest states for business include California (12 percent), Texas (12 percent), Florida (11 percent) and New York (10 percent).
Its products include excess and umbrella, general liability, directors and officers liability, fiduciary liability, employment liability, lawyers, allied medical, architects and engineers, miscellaneous errors and omissions, auto physical damage and motor truck cargo.
Maxum writes business through a select group of primarily independent wholesale brokers and general agents.
Maxum is rated A-VIII from A.M. Best and its statutory surplus has grown to more than $114.6 million.
Source: The Hartford
*This story appeared previously in our sister publication Insurance Journal.