BrickStreet Mutual Insurance and Motorists Mutual Insurance Co. announced they have begun to formalize an affiliation agreement between the two companies. By affiliating, the insurers said they’ll create a new super regional carrier ranked in the top 20 mutual companies in the country.

If approved by state regulators and closed as anticipated in July 2017, the affiliation will include more than 1,600 employees, 10 offices writing in 29 states, premiums of nearly $1.2 billion, a surplus of nearly $1.55 billion and assets of $4.5 billion.

The companies said they have been in discussion about the partnership for months.

Motorists Mutual Insurance, a member of Motorists Insurance Group, is headquartered in Columbus, Ohio and sells individual and commercial property/casualty insurance through 14,000 independent agents in Ohio, Indiana, Michigan, Kentucky, Pennsylvania and West Virginia.

BrickStreet is a monoline workers’ compensation carrier headquartered in Charleston, West Virginia, with offices in North Carolina, Illinois and Pennsylvania.

BrickStreet and Motorists said their joint venture using an affiliation agreement will allow them to partner together financially and operationally while maintaining their individual brands. As mutual companies, both will continue to be owned by their policyholders and remain headquartered in West Virginia and Ohio, respectively.

BrickStreet’s agents and policyholders will have access to other lines of commercial insurance outside of workers’ compensation through the BrickStreet/Motorists partnership. Likewise, Motorists will be able to grow its commercial lines book of business by providing workers’ compensation coverage for added classes and sizes of accounts.

“The joint venture using the affiliation model works best because it allows BrickStreet to expand its product offerings and services, while ensuring its headquarters remain in Charleston. We chose this framework of an affiliation very intentionally. This structure protects the BrickStreet brand, allows us to stay domiciled in West Virginia, and provides us with the opportunity to grow our company,” said BrickStreet CEO Greg Burton.

According to Motorists President and CEO Dave Kaufman, both companies benefit from this arrangement by improving risk diversification, expanding agency distribution and providing economies of scale for purchasing power. “The affiliation will benefit both companies’ policyholders, agents and associates – by working together, the companies will be much stronger,” he said.

According to company officials, the affiliation will need approval from insurance commissioners in West Virginia and Ohio, as well as in Iowa, New Hampshire and Wisconsin since Motorists has companies located in those states. BrickStreet will need to secure approvals in Pennsylvania, due to BrickStreet’s acquisition of HM Casualty in July.

Since it is not a merger, policyholder approval is not necessary, officials said.

If the affiliation is approved, the executive management team will be as follows: Greg Burton, executive chairman; Dave Kaufman, CEO; T.J. Obrokta (BrickStreet president) will be president; Charles Stapleton (currently Motorists chief operating officer) will be executive vice president and chief operating officer; Chris Howat (BrickStreet chief financial officer) will be executive vice president, chief financial officer and treasurer; and Susan Haack (Motorists treasurer and CFO), will be executive vice president and corporate secretary.

Each of the respective boards will have six BrickStreet representatives and six Motorists Mutual representatives, led by an executive committee of John Bishop (CEO, Motorists Group), Tom Flaherty (chairman, BrickStreet), Bob Smith (Motorists independent board member) and Marty Becker (BrickStreet board member and QBE chairman).

Kaufman said policyholders will have increased surplus security, state-of-the-art loss control, expanded commercial coverages and an integrated multiline technology platform while agents will have additional commercial lines products and services.

The announcement said that employment levels in West Virginia could increase in the future because nearly $60 million of workers’ compensation business from Motorists will be managed by BrickStreet, taking the company’s total workers’ compensation premium to $415 million. This, along with new specialty products, will be developed under the BrickStreet brand. These additional products will be marketed through Motorists’ group of companies.

Both carriers said their respective charitable foundations will remain active in their communities.

Motorists Mutual Insurance Co. was formed in Columbus, Ohio, in 1928 and sells individual and commercial property/casualty insurance through 14,000 independent agents in Ohio, Indiana, Michigan, Kentucky, Pennsylvania and West Virginia. Its is rated A (Excellent) by A.M. Best.

BrickStreet Insurance began as a state-backed insurer and then became West Virginia’s first private workers’ compensation carrier on Jan. 1, 2006. Since then, BrickStreet has expanded operations into other states. It is rated A- (Excellent) by A.M. Best.

Source: BrickStreet Mutual/Motorists Mutual

*This story appeared previously in our sister publication Insurance Journal.