Donegal Mutual Insurance Company Announces Completion of Its Acquisition of the Mountain States Insurance Group
May 25 2017 - 1:28PM
Donegal Mutual Insurance Company ("Donegal Mutual") announced today
that, following the receipt of all necessary approvals, Mountain
States Mutual Casualty Company ("Mountain States") merged with and
into Donegal Mutual effective May 25, 2017. Donegal Mutual is
the surviving company in the merger, and Mountain States' insurance
subsidiaries, Mountain States Indemnity Company and Mountain States
Commercial Insurance Company, have become insurance subsidiaries of
Donegal Mutual as a result of the merger.
Mountain States and its insurance subsidiaries had net premiums
written of approximately $33 million in 2016 in the states of New
Mexico, Colorado, Texas and Utah. As of the effective date of
the merger, Donegal Mutual assumed all of the policy obligations of
Mountain States and will market its products together with its
insurance subsidiaries as the Mountain States Insurance Group in
the Southwestern region of the United States. Donegal Mutual
has entered into a 100% quota-share reinsurance agreement with
Mountain States’ insurance subsidiaries with the intent of making
those subsidiaries eligible for A.M. Best Company's assignment of
Donegal Mutual's group rating of A (Excellent). Donegal
Mutual has also entered into services and technology license
agreements with Mountain States' insurance subsidiaries for the
purpose of reducing the operating costs of those subsidiaries
through economies of scale.
Donald H. Nikolaus, President of Donegal Mutual, remarked, "We
are pleased to announce the completion of our acquisition of the
Mountain States Insurance Group as we expand our operations into
the Southwestern region of the country. We look forward to
providing technology and operational support to the management and
employees of the Mountain States Insurance Group to increase the
efficiency of our ongoing operations in the region and to enhance
relationships with our agents and policyholders. We believe
this acquisition will enhance our overall business and provide for
significant future growth over time."
William F. Davis, President of Mountain States, stated, "We are
excited to be embarking on this new chapter in the long history of
the Mountain States Insurance Group. We anticipate our affiliation
with Donegal Mutual will significantly enhance our ability to
continue our longstanding commitment to providing excellent
products and services to our agents and policyholders."
Donegal Mutual, which was incorporated in 1889, is a mutual
insurance company located in Marietta, Pennsylvania. Donegal
Mutual underwrites a broad line of personal and commercial
insurance coverages. Donegal Mutual owns approximately 73% of
the voting control of Donegal Group Inc., an insurance holding
company. Donegal Mutual and the insurance subsidiaries of
Donegal Group Inc. conduct property and casualty insurance business
together as the Donegal Insurance Group and had net premiums
written of approximately $800 million in 2016 in 21 Mid-Atlantic,
Midwestern, New England and Southern states. The Class A
common stock and the Class B common stock of Donegal Group Inc.
trade on the NASDAQ Global Select Market (NASDAQ:DGICA)
(NASDAQ:DGICB).
For an indefinite period of time, Donegal Mutual will exclude
the business of the Mountain States Insurance Group from its
pooling agreement with Atlantic States Insurance Company.
Jeffrey D. Miller, Executive Vice President & Chief Financial Officer
Donegal Mutual Insurance Company
Phone: (717) 426-3529 ext. 7357
E-mail: jeffmiller@donegalgroup.com
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