ALFA MUTUAL INSURANCE CO. AND VIRGINIA MUTUAL
INSURANCE CO. COMPLETE STRATEGIC AFFILIATION
MONTGOMERY, Ala.-- Alfa Mutual Insurance Co. of Montgomery, Ala., entered into an affiliation with Virginia Mutual Insurance Co. of Richmond, Va. whereby Virginia Mutual transferred management and operational control to Alfa, company officials announced today.
"This is an exciting time for Alfa," said president Jerry Newby, explaining that it is an opportunity for the southeastern company to gain an immediate strategic market entry into Virginia and North Carolina. Alfa Mutual Insurance Co. was founded in Alabama in 1946. Since that time, the Alfa Insurance Group, which is comprised of six property and casualty companies, a life insurance company and several non-insurance entities, has expanded its coverage into Georgia and Mississippi and currently writes approximately $700 million in premium annually. Alfa employs 2,300 personnel. Its property and casualty companies are rated A++ and the life company is rated A+ by A.M. Best Co., a national insurance company rating firm. Alfa Mutual Insurance Co. and Alfa Mutual Fire Insurance Co. own a majority holding of Alfa Corporation (NASDAQ:ALFA), a publicly traded financial services holding company. Alfa Corporation is not a party to this transaction.
"As a result of our affiliation, A.M. Best upgraded Virginia Mutual's rating to A++ to reflect the increased financial strength of the company." Newby said. "Offices and employees of Virginia Mutual will remain in Richmond, and we will use this as a foundation to grow this business entity," he added.
Virginia Mutual was formed in 1935 and writes both commercial and personal lines with approximately $36 million in annual premium. It employs 90 home office personnel and conducts business through 150 independent agencies.
Ernest McGinley, president of Virginia Mutual said the affiliation adds stability and strength to Virginia Mutual. "Alfa is rated among the most elite and strongest insurance companies in the United States. This affiliation is great news for the policyholders, agents and employees of Virginia Mutual. We are excited about the opportunity to grow as part of the Alfa family," he said. In addition to serving as president of Virginia Mutual, McGinley also will be a vice president of Alfa Mutual.
Alfa Vice President of Mergers and Acquisitions Al Schellhorn says the transaction "offers Alfa prospects for future growth in two new states. This helps diversify Alfa's current business and allows us an opportunity to work with independent agents. This is a good situation for both companies -- Alfa gains access to new markets and a new distribution system, while Virginia Mutual benefits by its affiliation with one of the best insurers in America."
A new board of directors for Virginia Mutual was immediately named, including Newby, McGinley, Schellhorn, and Alfa executives Lee Ellis, Wayne Hawkins, and Steve Rutledge.