Liberty Mutual has completed its previously announced acquisition of super-regional carrier State Auto, finalizing an offer estimated by the parties at $1 billion.
With the acquisition, Liberty Mutual, the sixth-largest global property and casualty insurer, adds $2.3 billion in premium and becomes the second-largest carrier in the independent agent channel. State Auto markets its insurance products through independent insurance companies, which include retail agencies and wholesale brokers.
The completing the sale was announced March 1. The two companies will operate independently throughout most of 2022, Liberty Mutual said.
Liberty Mutual purchased all of the publicly held shares of State Auto Financial Corp. for $52 per be part of the all-cash transaction. State Auto’s stock has since been delisted.
With the completion of the deal, Liberty Mutual confirmed the immediate appointment of Kim Garland as president of State Auto. Garland was recently the company’s senior vice president of personal and commercial lines and managing director of State Auto Labs, State Auto's $25 million corporate venture capital fund.
According to some filing with the Connecticut Department of Insurance, certainly one of a number of regulators which had to approve the deal, the companies “represent they have no aim of changing the day-to-day management of the company and processes of” State Auto.
“…However, they are doing intend on nominating a new slate of directors and appointing new executive officers to be able to align using the other directors and executive officers from the other insurance companies inside the Liberty Mutual number of companies,” the department said in paperwork approving the sale.
In announcing its intention to purchase State Auto in July, Liberty Mutual referenced that company’s book of personal, business, specialty and farm insurance policies, and drew particular attention to State Auto’s ties to 3,400 independent insurance agencies across 33 states.
“Across Liberty Mutual and State Auto, there exists a shared resolve for the Independent Agency channel and to be the carrier preferred by independent agents,” Hamid Mirza, Liberty Mutual president and COO, Global Retail Markets US, said inside a statement.
The transaction was authorized by the boards of directors of State Auto Financial and State Auto Mutual, State Auto Financial shareholders, along with a number of regulators.
Neither Liberty Mutual nor State Auto earned a particularly high grade for handling their customers’ claims in its 2022 Insurer Report Card, an annual survey of body shops, CRASH Network reported.
Asked “How well does this insurer's claims handling policies, attitude and payment practices ensure quality repairs and customer service for motorists?” shops gave State Auto a grade of C, and Liberty Mutual a grade of C minus.
Converting letter grades to numerical equivalents, State Auto had a score of 580, ranking it 65th among the 93 carriers rated, and Liberty Mutual received a score of 440, ranking it 80th.
