2. INDUSTRYWIDE BESTWEEK
Hanover Exec Says Acquisition of Campania
A ‘Good Start’ as Group Eyes Health Industry
The acquisition of Campania Group Inc. by Hanover home health care, podiatrists, behavioral health specialists
Insurance Group Inc. is a good start but “not the end” for and, to a lesser extent, elder care providers, said Robinson.
a company with its sights set on insurance for the health Agents will be able to integrate the niche
care industry. products offered by Campania into other
Andrew Robinson, executive leadership team member Hanover coverages, like commercial automo-
responsible for Hanover’s health care business, told Best- bile or marine, Robinson said. “They can wrap
Week that Hanover has been “seeking to enter the health these around other professional coverages,” he
care market for some time” and found Campania’s lines of said.“We tend to build complete accounts in this manner.”
businesses appealing. The agreement with Campania follows Hanover’s
“Our view is not to enter into the meat of the med-mal announcement that it secured a deal to take over renewal
market,” Robinson said. “We’re interested in the niche-y rights for a majority segment of OneBeacon Insurance
stuff.” The company has also heard from its agents, who Group’s small and middle-market commercial business.
are looking to certain high-growth segments of insurance Hanover acquired as much as $400 million in renewals from
for the health care industry to “grow their books where OneBeacon, bolstering scale in Hanover’s commercial lines
there may be some contraction in other parts.” and increasing its portfolio with almost 20 new programs.
Hanover’s business is marketed and distributed by approxi- Hanover said it has launched new programs, purchased three
mately 3,000 independent agencies, according to BestLink. specialty providers and built industry and niche solutions for
The niche solutions offered by Vienna, Va.-based Campa- a dozen new markets over the past five years.
nia include insurance for durable medical equipment for —Chad Hemenway
I BANKS and boost their revenue streams.
From page 1 “It’s all about control,” Provost said. Financial enti-
ties want to save money and have access to reinsurance
to merger and acquisition activity, he said. options, he said.
“Every time I read about a bank merger, I assume I’m A lot of banks formed mortgage insurance captives in
losing a captive,” Provost said. the late 1990s and early 2000s, Pro-
In some cases, brand-new captives Captives State by State vost said. Surprisingly, he said, he is
are forming or changing states as Snapshot seeing that activity now, as well. After
a result of merger-related domicile New in Net Change
massive shakeups in the housing mar-
reviews. Vermont gained 11 new cap- State Captives* 2009 in 2009 ket and among mortgage insurers, Pro-
tives from financial institutions in Vermont 560 39 3 vost said,“They’re underwriting better
2009, including six that were not mortgages now than ever.”
Hawaii 162 4 -3
insurance companies. In Nevada, Gray said she is seeing banks form
regulators reported a surge in finan- South Carolina 161 13 4 captives to maximize their access to
cial-entity captives, including nine of Utah 148 33 26 low-interest loans through the Fed-
their last 21 registrations. Nevada 130 11 6 eral Home Loan Banks. The 12 Fed-
Banks create captives across a Arizona 99 7 -7 eral Home Loan Banks are a system
broad range of lines, including direc- * Active captives as of Dec. 31, 2009. of regional banks from which local
tors and officers liability, life, prop- Sources: State insurance departments. lending institutions borrow funds to
erty/casualty and group benefits, said finance housing, economic develop-
Valerie Barton, executive director of the American Bankers ment and infrastructure projects. Provost said he knows
Insurance Association. For banks, establishing captives of a handful of non-bank financial companies that formed
makes a lot of sense, she said. They may already operate captives to take advantage of FHLB funding.
industry companies and are comfortable with the role of Captives may also provide banks and other institutions
captives. with speed-to-market benefits, said William P. White, manag-
“It’s a very logical progression to take some of that risk ing principal, Prism Strategies LLC.
in-house,” Barton said. “Banks are used to taking risks, to “Where there are problems, there are usually ways to
understanding risks.That’s what they do.” bridge that gap of uncertainty,” said White, the former cap-
In the current economy, Barton said, financial institu- tive regulator for Delaware and Washington, D.C. “You can
tions — like all businesses — are also looking to diversify customize this, provided you’re willing to bear the risk.”
JanuaryXX, 2010 • BESTWEEK U.S./CANADA
Month 25, 5