Madison, Wisconsin-based American Family Insurance Mutual Holding
Company (American Family Insurance) announced today it has reached
agreement to acquire Ameriprise Auto & Home (AAH), a De Pere,
Wisconsin-based property-casualty insurance provider that primarily
sells its products through a partnership with wholesale retailer Costco.
The acquisition of AAH, a business unit of Ameriprise Financial, is
expected to close during the second half of 2019, pending regulatory
approval and satisfaction of other customary closing conditions.
American Family Insurance group is acquiring AAH for approximately $1.05
billion, subject to certain post-closing financial adjustments.
AAH will become a subsidiary within the American Family Insurance group
and operate under its existing name until a new name is identified and
approved by regulators. It’s planned that all AAH employees will be
retained and report to the subsidiary. Current AAH customers will retain
their policies with no change in coverage or service.
Why is American Family making this acquisition?
The acquisition continues American Family’s strategy to complement its
exclusive agents with distribution channels for customers who prefer to
handle their insurance matters in different ways. The acquisition also
broadens American Family’s business on a geographic basis, which spreads
out storm risk and helps further strengthen the company’s financial
“This is about serving more customers through channels they prefer, and
strengthening our ability to protect them,” said Jack Salzwedel,
American Family chair and chief executive officer.
“American Family exclusive agents continue to have great success. Our
direct-channel companies are growing. And last year, we merged with a
company that offers products through independent agents.”
“With this acquisition, we expand our efforts to reach customers who
prefer to acquire insurance through relationships they have with other
entities. By doing this and continuing to grow in our other channels, we
build scale, capabilities and financial strength to provide greater
value to our customers,” Salzwedel said.
Bringing the companies together
The acquisition brings together two Wisconsin companies with similar
cultures, values and customer focus. “We know each other very well, with
a fair number of employees who have worked at both companies,” Salzwedel
said. “There are similarities between the companies, but also unique
strengths and perspectives we can use to grow and improve the business.”
American Family Insurance is a multi-line mutual insurance group. It
serves customers in 19 states through its American Family agents, and
nationally through subsidiaries that sell products through the internet,
call centers, affinity partners and independent agents.
The group reported 2018 results of $9 billion in equity, $27.5 billion
in assets and $9.6 billion of direct premium written. The group employs
12,000 people through its various companies, with American Family-brand
products sold through 2,500 independent contractor exclusive agents.
AAH sells its products – auto, homeowners, renters, umbrella and some
specialty insurance lines – in 43 states and District of Columbia
through partners. It reported 2018 results of $789 million in surplus,
$1.8 billion in assets and $1.1 billion of annual direct premium
written. Approximately 70 percent of its premium is from auto insurance
sales. Ameriprise Auto & Home employs 1,800 people.
“We are proud of the exceptional value and award-winning service we’ve
provided to Auto & Home policyholders over the last several decades and
we sincerely thank each and every employee for their dedication and
contributions,” said Jim Cracchiolo, chairman and CEO of Ameriprise
Financial. “We are pleased to reach this agreement and feel confident
that we will be leaving the business in good stead given American Family
Insurance’s financial strength and reputation for quality products and
AAH makes a significant majority of it sales through a partnership with
Costco, which offers Ameriprise Auto & Home policies to its members
through its website. American Family and Costco have entered into a
Letter of Intent to continue that partnership.
AAH also sells its products through referrals from Ameriprise Financial
advisors. That relationship will continue after the acquisition.
Continuing a tradition of successful acquisitions
This transaction continues a history of successful mergers and
In 2012, American Family acquired direct non-standard auto insurer
Permanent General Companies (The General) and the former Lumbermens
Casualty Insurance Company, which was renamed Midvale Indemnity Company.
In 2013, American Family acquired direct homeowners provider Homesite
Group, and launched AssureStart, a managing general agent that sells
commercial insurance online to small businesses, and is the commercial
technology platform for American Family agents. AssureStart policies are
underwritten by Midvale.
American Family group continued its expansion when it converted to a
mutual holding company in 2017, allowing it to merge with Main Street
America, another mutual holding company, a year later. Main Street
America, which specializes in commercial insurance and surety bonds but
also sells property and auto insurance, distributes its products through
The acquisition of AAH further diversifies American Family’s storm loss
risk by reducing the group’s premium concentration in hail- and
tornado-prone states. While the merger with Main Street America
diversified catastrophe risk with its customer concentration on the East
Coast, the majority of AAH’s business is in western states.
American Family looks forward to California
AAH’s largest premium state is California, where it reported 2017 direct
premium written of $377 million. Of that, more than 80 percent is auto
premium. This acquisition will provide access to a very large customer
base in a state where American Family group does relatively little
“With our proven track record and strong investments in our people,
technology and other innovations, we know what it takes be successful in
today’s market. We’re confident we can draw on those qualities, while
building on AAH’s strengths, to make this new acquisition another
high-performing company within our group,” said Salzwedel.
America Family was advised on legal matters by Foley & Lardner and on
financial matters by Keefe, Bruyette & Woods, a Stifel Company.
About American Family Insurance
Madison, Wisconsin-based American Family Insurance group is the nation's
13th-largest property/casualty insurance group and ranks No. 311 on the
Fortune 500 list. The company sells American Family-brand products,
including auto, homeowners, life, business and farm/ranch insurance,
primarily through its exclusive independent contractor agents in 19
states. American Family affiliates (The
General and Homesite)
also provide options for consumers who want to manage their insurance
matters directly over the internet or by phone. Affiliate Main
Street America sells insurance products through independent
agents. Web www.amfam.com;
About Ameriprise Financial
At Ameriprise Financial, we have been helping people feel confident
about their financial future for more than 120 years. With extensive
asset management, advisory and insurance capabilities and a nationwide
network of approximately 10,000 financial advisors, we have the strength
and expertise to serve the full range of individual and institutional
investors' financial needs. For more information, or to find an
Ameriprise financial advisor, visit ameriprise.com.
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