Virginia Farm Bureau Completes $24.6 Million Countryway Acquisition

The Virginia Farm Bureau Mutual Insurance Co. has completed its $24.6 million acquisition of Countryway Insurance Co.

For Virginia Farm Bureau, the deal for Countryway will add an independent agent channel and allow it to expand its operation beyond the state of Virginia for the first time in its 60-year history.

Countryway will continue to be based in Syracuse, N.Y., and leveraged with the Virginia Farm Bureau's staff in Richmond, according to Jeff Dillon, treasurer and senior vice president of finance and business services for the acquiring company.

"The ultimate structure of business operations is still being planned," Dillon said in an email. "We expect staff in both locations to be involved in supporting the operations of both companies, and we intend to maintain a significant staff in Syracuse."

Dillon said just as in any acquisition, integrating both companies into a single technology platform will be a challenge moving forward. "Fortunately, we are nearing initial implementation of a new underwriting and claims administration system that will improve our business efficiencies and service capabilities for both companies," Dillon stated.

All of Countryway's net underwriting risk was transferred and ceded to the parent of the Virginia Farm Bureau Group, according to BestLink, which provides online access to A.M. Best's database of insurance information.

Countryway, which was acquired from United Farm Family Mutual Insurance Co., has annual premiums in excess of $33 million and operates primarily in rural New England, New York, New Jersey, Pennsylvania, Kentucky and Virginia, according to the Virginia Farm Bureau website. Distribution consists of 380 independent agents selling farm, home and automobile insurance products.

Virginia Farm Bureau was the largest writer of farmowners multiperil insurance in Virginia during 2009, and held a 65% market share, according to BestLink. The company's distribution channel has consisted of exclusive agents. In 2010, the Virginia Farm Bureau Group ranked among the top 15 property/casualty insurance companies operating in Virginia based on direct premium written and was the leading provider of farmowners multiperil insurance in the state, according to BestLink.

A.M. Best Co. upgraded Countryway's financial strength rating to A- (Excellent) from B++ (Good) on May 20, 2011, to reflect the acquisition.

Members of the Virginia Farm Bureau Group currently have a Best's Financial Strength Rating of A- (Excellent).

(By Al Slavin, senior associate editor, BestWeek)