As big as Liberty Mutual is, this sounds like they bit off more than they could chew acquiring Ohio Casualty and Safeco close together. Need to raise some cash for these expenses/acquisitions!
I never liked dealing much with them. An appointment with one of their agencies meant that Liberty Mutual had access to our rates & underwriting guidelines. Tell me that the info never got passed over to the company side of Liberty.
“more than they can chew?” This is just part of the chewing, pal. They retain more than 80% equity and 97% of the voting power. Just a simple corporate move without having to grovel at the feet of greedy bankers. It’s called liquidity. Super liquidity. …and damn smart.
Agreed, smart move and what other option do they have? Look at the debt/equity ratio. Heavily leveraged. But they knew this back in 2000. Seems to have worked for them.
I am assuming your are talking about the Helmsman Agency which they dissolved. They kept those rates and rules tight because they were scared to death they would be locked out of those markets if someone even perceived that was going on. It would have locked them out of the markets to supplment the direct book(which is no longer). Even when they purchased the agency book (peerless, indiana) they had pretty tight controls (actually they had no ability to make them talk to each other) in place to keep the direct market at bay for the same reason.
Also the article is wrong. the rapid expansion began in 2000 with Wausau, TNIC, One Beacon book, Golden Eagle………
This gets done, and then Selective will go bye-bye. But in reality, this means that the party is over. Now these agency carriers will have to report to STOCKHOLDERS. That is a whole different ballgame than the charade they’ve been playing for the last 6-8 years. No more lack of underwriting in the market, and no more undercutting the market price.
I think they are raising cash in order to make another big purchase. They have become opportunists and are no longer satisfied with organic growth. Their ambitions are huge. If this is successful, look for a purchase in the 1-2 billion range within 6 months.
Liberty bought some decent underwriting companies, and then Safeco. Safeco had a fabulously intuitive small-to-midsize business rate and issue platform, but what do they do? They dump Safeco’s inuitive system and go back to the eighties with the Peerless platform.
The key to growth is both remaining competitive and providing ease of service to the retailers of their products. In our estimation, Peerless is the path of most resistance in comparison to our other carriers, and they wrecked Safeco Commercial just to get a personal lines book
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is agency plant geeting to purchase
@ fixed price per share prior to IPO.
John
As big as Liberty Mutual is, this sounds like they bit off more than they could chew acquiring Ohio Casualty and Safeco close together. Need to raise some cash for these expenses/acquisitions!
I never liked dealing much with them. An appointment with one of their agencies meant that Liberty Mutual had access to our rates & underwriting guidelines. Tell me that the info never got passed over to the company side of Liberty.
“more than they can chew?” This is just part of the chewing, pal. They retain more than 80% equity and 97% of the voting power. Just a simple corporate move without having to grovel at the feet of greedy bankers. It’s called liquidity. Super liquidity. …and damn smart.
Agreed, smart move and what other option do they have? Look at the debt/equity ratio. Heavily leveraged. But they knew this back in 2000. Seems to have worked for them.
I am assuming your are talking about the Helmsman Agency which they dissolved. They kept those rates and rules tight because they were scared to death they would be locked out of those markets if someone even perceived that was going on. It would have locked them out of the markets to supplment the direct book(which is no longer). Even when they purchased the agency book (peerless, indiana) they had pretty tight controls (actually they had no ability to make them talk to each other) in place to keep the direct market at bay for the same reason.
Also the article is wrong. the rapid expansion began in 2000 with Wausau, TNIC, One Beacon book, Golden Eagle………
Not to mention it will help get AM Best and S&P off their back since it will show they are capable of getting access to cash ASAP.
This gets done, and then Selective will go bye-bye. But in reality, this means that the party is over. Now these agency carriers will have to report to STOCKHOLDERS. That is a whole different ballgame than the charade they’ve been playing for the last 6-8 years. No more lack of underwriting in the market, and no more undercutting the market price.
This is why McPartland left, I’m sure.
I think they are raising cash in order to make another big purchase. They have become opportunists and are no longer satisfied with organic growth. Their ambitions are huge. If this is successful, look for a purchase in the 1-2 billion range within 6 months.
Liberty bought some decent underwriting companies, and then Safeco. Safeco had a fabulously intuitive small-to-midsize business rate and issue platform, but what do they do? They dump Safeco’s inuitive system and go back to the eighties with the Peerless platform.
The key to growth is both remaining competitive and providing ease of service to the retailers of their products. In our estimation, Peerless is the path of most resistance in comparison to our other carriers, and they wrecked Safeco Commercial just to get a personal lines book