Main Street America Acquires Surety Line From Texas-Based Carrier

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January 4, 2010 Monday 02:41 PM EST

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Main Street America Acquires Surety Line From Texas-Based Carrier

Al Slavin

HOUSTON

Main Street America Group has acquired the surety division of Commercial Alliance Insurance Co., a Houston-based carrier that launched the new product line just over two years ago.

Terms were not disclosed.

CAIC President Luis Bordes told BestWire that most of the business was concentrated in Texas. A drop-off in construction hit after the company launched the new line in November 2007, which Bordes said placed a drain on start-up overhead. He also said the quality of the surety applicants had tapered off.

"For us, it's a small line of business," Bordes said. CAIC's surety line generated $579,000 in net premiums written for 2008 with a pure loss ratio of 15.2, according to BestLink.

Bordes said CAIC will focus on expanding its personal lines business. Existing CAIC surety bonds in the six- to nine-month range will be placed in run-off. The balance of renewals and contracts will be placed with Main Street America Group, a super-regional property/casualty insurer based in Jacksonville, Fla.

Both employees in CAIC's surety division will join Main Street America Group. Sterling Emens will become Main Street America Group's director of bond specialty underwriting in Texas, while Veronica Rivera will serve as an agency development specialist.

Main Street America Group was the 36th-largest writer of surety coverage in the United States for 2008, according to BestLink. The mutual insurer had $20.2 million in direct premium written for its surety line in 2008, up 13% from a year earlier.

Brian Beggs, Main Street's vice president of bonds, sees an opportunity in Texas that stems from Main Street Station, a desktop system that enables agents to order and process surety bonds within minutes. The company had $809.2 million in net premiums written for 2008, business that was written through its network of more than 1,500 independent agents.

Main Street America Group said it entered the Texas property/casualty market in 2008 when it began providing assumed reinsurance for homeowners business through managing general agents. The company operates six property/casualty carriers: NGM Insurance Co.; Old Dominion Insurance Co.; Main Street America Assurance Co.; MSA Insurance Co.; Great Lakes Casualty Insurance Co.; and Grain Dealers Mutual Insurance Co.

Commercial Alliance Insurance Co. currently has a Best's Financial Strength Rating of A- (Excellent).

Main Street America Group currently has a Best's Financial Strength Rating of A (Excellent).

(By Al Slavin, senior associate editor, BestWeek)

January 5, 2010

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