Hanover Insurance Group to Acquire AIX Holdings

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August 6, 2008 Wednesday 03:03 PM EST

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Hanover Insurance Group to Acquire AIX Holdings

Chad Hemenway

WORCESTER, Mass.

Hanover Insurance Group Inc. said it has entered into an agreement with AIX Holdings Inc. to purchase all the stock of the specialty property/casualty insurance company.

Terms of the acquisition were not disclosed in a statement released by Hanover (NYSE: THG). The transaction is expected to be completed by the end of the fourth quarter pending regulatory reviews and approvals.

AIX Group of Windsor, Conn., provides services through wholly owned subsidiaries Nova Casualty Co., and AIX Specialty Insurance Co. According to the Hanover statement, AIX provides general liability, workers' compensation, property and auto products for "underserved markets where there are specialty coverage or risk management needs."

"Many of our agent partners are seeking carriers that can deliver program solutions and the ability to utilize alternative risk transfer techniques in specialized markets," said Frederick H. Eppinger, chief executive officer of Hanover. AIX Holdings is "one of the very best carriers serving this market," he said.

AIX President Robert Shultz said the acquisition will allow his company to "offer our program capabilities through our existing distribution partnerships and through Hanover partners."

Hanover Insurance Group Inc. reported a $10.2 million second quarter loss, due to the net loss from discontinued operations, including an estimated after-tax loss of $66.1 million related to the pending sale of our First Allmerica Financial Life Insurance Company business. Hanover reported an income of $59.8 million in the second quarter last year.

In June, A.M. Best Co. affirmed the Financial Strength Rating of A- (Excellent) of Hanover Insurance Group Property and Casualty Cos. AIX Group also currently has a Best's Financial Strength Rating of A- (Excellent).

(By Chad Hemenway, associate editor, BestWeek: [email protected])

August 7, 2008