The Connecticut-based Response Insurance Group of Companies, a direct writer of auto coverage, announced that it has signed a stock purchase agreement to acquire Cincinnati-based Worldwide Insurance Company and Worldwide Direct Auto Insurance Company from Great American Insurance Company, the insurance subsidiary of American Financial Group, Inc. (AFG)
“The purchase will more than double the size of Response and make it one of the nation’s largest auto insurers,” said the bulletin. After the completion of the sale and regulatory approval, the Response Insurance group, a subsidiary of Direct Response Corporation, “will have more than 100,000 in-force policies in 44 states putting it among the 15 largest direct auto insurers in the nation and among the 100 largest personal auto insurers.”
Mory Katz, Direct Response President & CEO, made the announcement as the Company signed a stock purchase agreement for an amount equal to the policyholders’ surplus of the Worldwide companies plus an additional $17 million. The transaction will require the filing of a “Form A” application and approval from the Ohio Department of Insurance.
“This acquisition solidifies our plan to build Response into the next large national direct auto insurer in the country,” Katz indicated. He estimated that the company’s net written premium for 2003 will be $125 million. The acquisition includes a personal auto book of business with more than 55,000 policyholders, renewal rights on other policies, and a call center in St. Louis, MO.
The announcement noted that “The premiums generated by the Worldwide companies represented approximately 70% of AFG’s personal auto insurance premiums written on a direct basis.”