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Indiana's property & casualty insurance companies.

Indiana's Property & Casualty Insurance Companies

When you think of property and casualty insurance, you may think of the big five: State Farm, Allstate, American International, Aetna or Liberty Mutual. Think again. You can buy Indiana. You can deal with a number of strong, "Superior" or "excellent," A-rated firms and keep your payments right here on home turf. A few specialized companies deal with farmers, lumbermen, truckers, doctors and basketball stars. Others insure practically everybody who wants peace of mind. Many were founded before the 1910s, so they have impressive track records. All tend to have a layered history of begats, complex genealogies, changed names and adopted offspring, so a paper trail could stretch back for years througy yellowing, lockboxmusty policies. You may recognize some familiar logotypes from your past.

The industry was shaken a bit in October by a report from the consumer group Public Citizen, which claimed that five of the nation's top property and casualty companies--none of which are based in Indiana--could have serious trouble in an economic downturn. The group later recanted many of its charges about the solvency of some of the top insurers, but the allegations left a cloud for insurance companies to clear up.

One of those doing the clearing is Robert A. Anker, president and CEO of Indiana's largest property and casualty insurance company, American States. "On the national basis, while there is room to improve the solvency oversight in the property and casualty business, there isn't any credible evidence at all of major insolvency or failure," he says. "The occurrence of failure in the property and casualty business is relatively low.

"When you look at the state level," he adds, "the Department of Insurance has a really exemplary record of handling situations where companies get themselves into trouble. Working with the companies, they get them back out of trouble or handle the situation effectively through an insolvency process. They are a watchdog."

One person who has been such a watchdog is H. Peter Hudson. He now is chairman, president and CEO of Monroe Guaranty Insurance Co., based in Carmel, but from the mid-1970s to the early '80s he served as insurance commissioner in Indiana. "You are going to have insolvencies in this business as you do failures in every type of business: manufacturing, retailing or anything else," he says. "I don't in any stretch of the imagination see the insurance industry as ripe for the kind of thing that happened to the savings and loans."

Using total "net premiums written," we selected the top firms. All are "domiciled" and headquartered in Indiana, and they make an impressive lineup.

1. American States

Insurance Co.

Finger down A.M. Best Co.'s list of this country's property and casualty writers and you'll find that the property and casualty segment of American States' parent company, Lincoln National Corp. of Fort Wayne, ranks number 21 nationally. American States is the segment's top producer. According to Lincoln's annual report, this segment is among the best-performing in the business. It represents 35 percent of Lincoln's total revenues and generally a greater portion of its total profits. During the last three years when the property and casualty business cycle was at its most favorable point, American States was Lincoln's greatest source of earnings. CRedit is due to a very high degree of automation that, Lincoln says, not only leads to significantly lower costs than for other insurers but also allows more rapid response to the service needs of its customers and agents. In 1989, American States' net premiums written totaled $1.97 billion including premiums of its subsidiaries, which makes it Indiana's largest property and casualty company. A major proption of that was auto liability and auto physical insurance, commercial multiperil coverage, worker's compensation insurance and homeowner policies.

American States is licensed to do business in the District of Columbia and all states except Kentucky and Connecticut. Approximately 6,400 agents market the coverage and 4,900 employees work directly for the property and casualty group. American States traces its origins back to the American Automobile Indemnity Co., which began offering protection to Indiana motorists in 1929. In 1941, it added the American States Fire Insurance Co. Both merged with the Lincoln National Life Insurance Co. in 1962 when stockholders sold the companies to the Fort Wayne insurance concern. Today, American States is one of 11 domestic property and casualty and 11 domestic life-health companies that operate under the Lincoln National corporate umbrella.

Another Lincoln affiliate, K&K Insurance Group Inc., has become a major provider of service to the sports, leisure and entertainment industries. One of K&K's clients is the National Basketball Association, for which it tailore a first-of-its-kind disability program.

Lincoln assumed an international aura in June this year when Dai-Ichi Mutual Life Insurance Co. of Tokyo bought 9.6 percent of the voting rights in Lincoln National and paid $312 million for convertible preferres tock. The two companies have had a reinsurance agreement since 1987. Ian M. Rolland is president and CEO of Lincoln National. Robert A. Anker became president and CEO of American States in March 1990. Comments Anker: "Somebody has to be second, but it doesn't have to be us."

2. Indiana Insurance Co.

The Indiana Insurance Co. belongs to another group that's international in scope. This global connection is with tulip and windmill country and is headquartered at The Hague in the Netherlands. Nationale-Nederlanden International B.V. is the 15th-largest insurer in the world, operates in 22 nations and employs 25,000 people. In the United States, Nationale-Nederlanden controls nine life-health companies and nine property and casualty companies, which produce annual revenues of nearly $2.7 billion. That is about a quarter of the parent company's worldwide revenues. Indiana Insurance and subsidiary Consolidated Insurance Co. contributed $285.6 million net premiums written in 1989, making it the state's second-largest property and casualty firm. It writes more auto liability policies than any other type of insurance, with commercial multiperil second in 1989. Other major lines of insurance are homeowners, auto physical and worker's comp.

The company started as the Indiana Fire and Marine Insurance Co. in 1851, took its present title in 1875 and in the early 1900s became inactive. It resumed business under its perpetual state charter in 1922. Assets surpassed $1 million by 1937 and a subsidiary, the Consolidated Insurance Co., was launched in 1956. In 1972, the firm was purchased by the National Distillers & Chemical Co. of New York, whose major interests are in liquor, chemicals and metals. With its wholly owned subsidiaries, including Consolidated, the corporation was sold to Nationale-Nederlanden in 1985.

Indiana Insurance is licensed in 10 states but operates primarily in five: Indiana, Kentucky, Ohio, Michigan and Wisconsin. About 950 independent agents sell Indiana Insurance policies and in 1989 more premiums were written in the Hoosier state than in any other.

Joseph H. Youngs is chairman of the board, Albert R. Kobert is CEO and H. STanley Newman is president and COO.

3. United Farm Bureau

Insurance Co.

The Indiana Farm Bureau has three insurance companies under its tent, the United Farm Bureau Mutual Insurance Co., UFB CAsualty Insurance Co. and the United Farm Bureau Life Insurance Co. United Farm Bureau's total net premiums written in 1989 were $274.2 million, making it Indian's third-largest property and casualty group. It is said to be the largest "domestic" insurer in the state, which means its policies are written only in Indiana. It is also the 98th-largest property and casualty insurer in the country.

Approximately 650 agents sell automobile and farm owners insurance for Farm Bureau members exclusively. Other casualty coverages as well as fire are written for non-members. Drivers who are claim-free receive a discount of 5 percent to 20 percent, but drivers with a poor claim history are surcharged.

The company is comparatively young, incorporated in 1934. It was originally an offshoot of the State Farm Mutual Co. of Bloomington, Ill. Local directors, however, became concerned that Indiana money was leaving the state, so they started their own company. That way, they could control how dollars were invested and could reflect the interests of the Indiana farmer better. The company is constructing a new downtown Indianapolis corporate headquarters that it plans to occupy by February 1992.

Thomas L. Ulmer, for many years CEO and executive vice president, resigned last August and was replaced as CEO by Donald E. Henderson. Harry L. Pearson is president and chairman. Alice K. Kroll is vice president of operations.

4. The Medical

Protective Co.

Only doctors and dentists need apply, but evidently plenty do, because Medical Protective accumulated $203.3 million in net premiums written in 1989, all medical malpractice policies. This amount makes it the fourth on our list. The firm is licensed in 30 states. Best's says "management has been phasing business out in Michigan and Illinois where the experience has been particularly adverse. It has increased emphasis on business in the South Atlantic region, particularly North Carolina and Virginia." The company was incorporated in 1909 and is a successor to the Physicians Defense Co. formed in 1901 and the Physicians Guaranty Co. organized in 1899.

Dale F. Doehrman is chairman of the board and CEO. Robert W. Gibson is president and COO, and Timothy P. Beck is CFO.

5. Meridian Mutual

Insurance Co.

Meridian Mutual is the fifth-largest Indiana-based property and casualty company with $170.0 million in net premiums written in 1989, including those of subsidiaries. The group includes Meridian Security Insurance Co. and the Vernon Fire and Casualty Insurance Co., which are owned by a downstream holding company. Meridian was founded as Farmers Mutual Liability Co. in 1925 to provide automobile liability coverage to residents of rural Crawfordsville. Through acquisitions and internal growth, it is now a respected provider in the states of Illinois, Indiana, Kentucky, Michigan, Ohio and Tennessee. Vernon provides coverage for small and medium-sized businesses only in Indiana. As traditional specialists in the field, more than half of Meridian's business is in private passenger automobile insurance, but it is attempting to diversify. It is developing other products, such as a garage liability package discount, a worker's compensation package for Kentucky and specialty products for office buildings, retailers, wholesalers and barbers and beauticians. The company plans to introduce about three new commercial packages every year.

Last October, Norma J. Hicks was named president and CEO of Meridian Mutual, replacing Harold C. McCarthy, who was named chairman of the board. Richard O. Ristine, who was chairman for more than 15 years, now heads the board's executive committee.

6. Protective Insurance Co.

Protective is the lead company of another insurance collective, owned by Baldwin & Lyons Inc., an Indianapolis-based holding company. Protective owns the hoosier Insurance and the Sagamore Insurance companies. The sixth-largest Indiana-based property and casualty firm is unusual because it concentrates on coverage for large trucking fleets which have large amounts of self-insurance. Worker's compensation insurance also is a large part of Protective's business. Protective operates from its headquarters in Indianapolis and from a regional office in California. total net premiums written for 1989 were $76.4 million, including those of subsidiaries.

The company is youthful compared with many in Indiana. It was established in 1954 as a successor to Protective Mutual Insurance Co., which was organized in 1947.

John C. Aldin is chairman of the board and CEO. Gary W. Miller is president and COO.

7. Indiana Farmers Mutual

Insurance Group

The number seven property and casualty group in Indiana had $49.1 million in net premiums written in 1989. The Indiana Farmers Mutual Insurance Group includes Indiana Farmers Mutual, Town & Country Mutual Insurance Co. and indiana Union Mutual Insurance Co. All operate within Indiana but are authorized for reinsurance in Kentucky.

Farmers Mutual was originated by the Grange in 1877 to provide insurance for farm properties. Beginning in 1977, the company absorbed the Indiana Mutual Hail Insurance Co.> the Gibson, Warrick and Vanderburgh County Farmers Mutual Insurance Co.> TheFarmers Union Mutual Fire Insurance Co. of LaPorte> and the Bartholomew County Farmers Mutual Fire and Lightning Insurance Co. The company's lines include auto, homeowners and farm liability as well as commercial multiperil packages. Policies are sold by 265 agents.

Last year, the IF Group was named company of the year by the Professional Insurance Agents of Indiana. It supports its agents by providing help from the underwriting and claims department and customized assistance with individual advertising. It also makes meeting facilities and teachers available for various professional courses and sponsors exhibit booths and programs at conventions.

Management is Harry P. Cooper Jr., chairman of the board> and Aja C. Harper, president, CEO and treasurer of all three companies.

8. Grain Dealers mutual

Insurance Co.

The eight-largest property and casualty firm in the state, with $44.0 million net premiums written in 1989, is Grain Dealers Mutual and subsidiary Companion Insurance Co. Its roots go back to the Grain Dealers National Mutual Fire Insurance Co., which was incorporated in 1902. In 1951, the charter powers were broadened to permit multiple-line underwriting. Subsidiary Companion Insurance was formed in 1962. Approximately 535 agents write policies in 29 states. A branch office in Omaha, Neb., has handled services to claim holders in the Western states since 1914. Another branch is located in Greensboro, N.C.

Grain Dealers' largest area of insurance is auto liability and physical, and fire and homeowner insurance combine to make up about a quarter of the company's net premiums. The company is administered by President and CEO G. Keith Wagner.

9. Monroe Guaranty

Insurance Co.

Monroe Guaranty is run by the Cook Group Inc. of Bloomington, which controls all of the outstanding stock. Cock owns and manages 21 corporations, most of them involved in the manufcture and distribution of high-tech medical and surgical products. Monroe Guaranty had $42.7 million net premiums written in 1989 and is Indiana's ninth-largest property and casulaty firm. It caters primarily to business: three-fourths of its net premiums written were in commercial multiperil and worker's compensation. Its agents also handle lines such as fire, inland marine, general and umbrella liability, full coverage automobile, glass, burglary and theft.

Monroe Guaranty is licensed in Indiana, Illinois, Kentucky and Ohio. Chairman of the board, president and CEO is H. Peter Hudson. David E. Thomas is executive vice president and COO.

10. Statesman Insurance


Statesman is licensed in 13 states but sells primarily in Pennsylvania and Indiana. Net premiums written last year were $41.0 million, so it is number 10 on the list. Auto liability and physical insurance are its biggest lines, with homeownerM worker's comp and commercial multiperil policies each also generating several million dollars in net premiums in 1989.

The company was organized in 1956. A holding company, SICO Inc., was created in 1985 with 88.3 percent of the stock held by the Statesman Insurance Employee Stock Ownership Plan.

In May 1990, the Northwestern National Holding Co., a Milwaukee-based division of Armco, signed a letter of intent to purchase SICO for $24 million. After approval by Indiana regulatory officials, the deal was concluded at the end of October, Statesman will continue to have its home-office operations in Indianapolis and will function as a stand-alone unit of the Northwestern National group.

Orval O. Allen recently retired as chairman and president after 44 years with the company. Thomas F. Caughey, who has had 20 years of insurance experience on the East Coast, is president and COO.

11. Indiana Lumbermens

Mutual Insurance Co.

Less than a million dollars separates Indiana Lumbermens Mutual and Statesman. Lumbermens wrote $40.1 million in net premiums in 1989.

The company goes back to 1896, when members of the Indiana Retail Lumber Dealers Association, disenchanted by the high rates charged to get coverage for their lumberyards, decided to insure themselves. They raised $2,500 to start the fund. (Now Lumbermens has assets of more than $70 million.) Their ante-up money was wiped out in 1897, so they raised another thousand, ended up with $527.75, but were still determined. By 1918, ILM had expanded to Kansas, Arkansas, Missouri and Oklahoma and was writing its first automobile policies. Windstornm, tornado and other lines were added over the years. Now coverages number in the hundreds, though the biggest lines are surety, commercial multiperil and worker's comp. Along the way, Lumbermens absorbed the Fidelity Mutual Insurance Co. of Indianapolis and the Southeastern Mutual Insurance Co. of Adrian, Mich.

Business is generated through three managing general agents, 52 independent agents and 14 branch offices. The company is licensed to sell in the District of Columbia and in all but nine Eastern states. Its specialty is still lumber and woodworking coverage.

H.A. Pasch is chairman of the board> R.L. Harrison is president and manager.

12. National Insurance


This Indianapolis-based specialty carrier handles motorcycle and nonstandard automobile liability and physical damage coverage. About 3,400 independent agents generated $39.5 million in net premiums written in 1989.

National Insurance Association began operations in 1973, and operates in about half of the states. It writes more premiums in Indiana than any other state. The sole shareholder is Ronald J. Glanzman, who also serves as chairman and president.

13. Brotherhood Mutual

Insurance Co.

This Fort Wayne company got its start in 1935 as the Brotherhood Mutual Insurance Co. of the Conference of the Defenseless Mennonite Church of North America. It took over the surplus of the church's mutual aid society, which dated back to 1917. In 1944, the company became independent of the church and dropped the last half of its name.

In 1989, Brotherhood Mutual had $26.9 million in net premiums written, mostly in commercial multiperil coverage. That is a marked departure from its original focus> until 1960, its business was confined to fire and allied lines coverage. Brotherhood in 1989 also wrote more than $1 million each in homeowners, worker's comp, auto liability and auto physical. The company last year added camper and student medical coverage. Though it no longer is affiliated with the Mennonite church, about three-quarters of its written premium is church-related.

Brotherhood operates in almost half the states, though about half of its business is Indiana, Ohio, Oklahoma and Michigan. Paul A. Steiner is chairman, president and CEO.

14. North Atlantic Casualty

and Surety Insurance Co.

North Atlantic's net premiums written in 1989 also round out to $26.9 million. It opened for business in 1979 and operated until 1985 under the name Lumbermens National Insurance Co. At that time, the company was purchase by Brougher Insurance Group, which is headquartered in Indianapolis. Brougher now is owned by the WASA Insurance Group, which is the third-largest life and fifth-largest property insurance company in Sweden.

Among the company's lines are professional liability for lawyers, real-estate agents, dentists and directors and officers. Educators and public officials buy liability coverage from North Atlantic, and foreign students traveling in the United States purchase medical coverage. Medical stop-loss coverage also is one of North Atlantic's mainstays. Slightly more than half of the company's business falls under the group accident and health category, and about a quarter is in medical malpractice.

G. Thomas Folds serves as president of North Atlantic> vice president, CFO and treasurer is Jack A. Hewett.

15. Universal Fire and

Casualty Insurance Co.

Universal got its start in the medical malpractice business in 1976 under the name Physicians and Surgeons Liability Insurance Co. It changed its named in 1983, and in 1985, changed product lines to non-standard homeowner, dwelling, fire and vacancy coverage, along with commercial fire, garage liability and general liability. Universal wrote $7.3 million in net premiums in 1989.

The Munster-based company is licensed in Indiana, Illinois, Missouri, Nebraska and Arizona, but does virtually all of its business in Illinois and Indiana.

John E. Seward Jr. serves as chairman, president and CEO.

Other Indiana P and C


Other smaller Indiana-based P and C companies include Continental American Insurance, which is based in Indianapolis and specializes in trucking risks. Continental h ad $6.9 million in net premiums written in 1989.

Huntington Mutual Insurance Co., headquartered in Huntington and licensed in Indiana, wrote $1.8 million in net premiums in 1989, primarily in agricultural risks.

The smallest Indiana property and casualty company is the Home Mutual Insurance Co. of Tell City. Its $162,000 in net premiums in 1989 came from homeowner's and fire lines.
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Author:Johnson, J. Douglas
Publication:Indiana Business Magazine
Date:Jan 1, 1991
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