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BOSTONLiberty Mutual Group Inc. is overhauling its $2.5 billion middle-market operations, selling the renewal rights to its direct business to a trio of brokers and forming a unit to write business sold through agents and brokers.
As part of the change, Boston-based Liberty Mutual will retire its Wausau Insurance Cos. brand. Wausau, which Liberty Mutual bought in 1999, wrote both direct and producer-generated business.
The new unit, Liberty Mutual Middle Market, is headed by Chief Operating Officer Mark A. Butler, former executive vp and general manager of field operations for Liberty Mutual's National Market division.
Liberty Mutual Middle Market will provide property/casualty products to midsize businesses, including commercial auto, property, general liability, umbrella and workers compensation, according to the company.
In addition, Liberty Mutual announced it has agreed to sell the renewal rights from its direct business to three brokerages: Itasca, Ill.-based Arthur J. Gallagher & Co.; Chicago-based Hub International Ltd.; and Briarcliff Manor, N.Y.-based USI Holdings Inc.
Each of the brokerages has offered to employ Wausau sales and service staff, Liberty Mutual said in a statement. The sale of the renewal rights is expected to close on or around March 1.
Gallagher said in a statement that it is acquiring the renewal rights to Liberty Mutual's middle-market commercial property/casualty business in the insurer's Midwest and Southeast regions and that the brokerage expects to hire around 75 Liberty Mutual producers in those areas. In addition, Gallagher said it is acquiring renewal rights and hiring the national producer group from Wausau Signature Agency.
Gallagher noted that the deal includes an initial cash-and-stock payment of about $44 million and up to $120 million in additional payments for two years after the deal closes.
Hub said that it is acquiring renewal rights for Liberty Mutual's Western region, which encompasses Arizona, Arkansas, California, Colorado, Hawaii, Kansas, Louisiana, Nebraska, Oklahoma, Utah and Texas. Terms were not disclosed.
USI, meanwhile, is buying the renewal rights for business in the Northeast, USI said, adding that it intends to hire approximately 76 staff from the acquired business. The brokerage did not disclose terms.
"Today's announcement reinforces our commitment to being a leader in commercial insurance. The agreements with Gallagher, Hub and USI speak to the quality of our business and desire to form strong, mutually beneficial relationships with agents and brokers who have earned oustanding reputations among middle-market buyers," Edmund F. Kelly, chairman, president and chief executive officer of Liberty Mutual, said in a statement.
Wausau, founded in Wausau, Wis., in 1911, was one of the earliest writers of workers comp coverage. It adopted a train depot as its logo in 1954 and built a brand that became widely recognized over the next 50 years.