American Family Insurance has signed a definitive agreement to sell The General to Sentry Insurance for $1.7 billion in a deal expected to close by the end of the year, pending regulatory approval, the companies announced Thursday.
The General, which is based in Nashville, Tennessee, and was acquired by American Family in 2012, covers the non-standard auto insurance segment for drivers who are considered higher risk. Madison-based American Family said the segment “no longer aligns with American Family’s strategic focus.”
The General has served the market since 1963. Sentry serves the segment with it Middleton-based Dairyland unit, which was founded in 1953 and acquired by Sentry in 1966.
“This acquisition is the largest in our 120-year history,” Pete McPartland, chairman and CEO of Sentry, said in a statement. “It brings together two of the strongest brands in the non-standard auto industry. Together, Dairyland and The General will be better able to meet the specialized needs of even more drivers across the country. It’s an exciting step forward for both companies, and I’m proud of the work our team has done to make this possible.”
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Stevens Point-based Sentry will purchase The General for about $1.1 billion in cash, with assumed liabilities and required capital boosting the value of the deal to $1.7 billion.
Both brands will continue to operate independently as Sentry and The General work through the integration process, with current customers of The General retaining their policies with no change in coverage or service.
American Family said it worked with Sentry “due to its experience and success in the non-standard auto segment, common mutual company operating model, a shared commitment to the non-standard customer, and their similar values-driven culture.”
“We’re proud of the capabilities our enterprise has helped The General build, refine and in some instances, discover, over the past decade-plus,” Bill Westrate, chairman and CEO of American Family, said in a statement. “As part of our enterprise, The General has grown its revenue more than five-fold, driven consistently profitable business, entered into new states while remaining dedicated and passionate about the customers and market it serves.
“We’ve found a strategic and cultural fit in Sentry, where the growth and momentum that The General has will continue. We’re confident that Sentry’s expertise, strong reputation in this market and employment culture will not only continue to serve The General’s customers well but will also ease the transition for The General’s employees.”
American Family is the nation’s 12th-largest property/casualty insurance group, ranking No. 243 on the Fortune 500 list. It includes CONNECT, powered by American Family Insurance, The General, Homesite and Main Street America Insurance.
Sentry, a mutual insurance company known for its expertise in business insurance, also provides comprehensive coverage for non-standard auto, motorcycle, and off-road vehicles through its Dairyland brand.
“The General has built a strong foundation under American Family’s leadership, and we’re excited to take the reins as it joins Sentry,” McPartland said. “We look forward to getting to know The General’s 1,300 employees who will join Sentry’s 5,000-strong workforce and working with them to continue to grow the business, providing more drivers with the coverage options they need, whether through our independent agents or directly with The General.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.