American Family Insurance said Wednesday it plans to acquire direct homeowners insurance company Homesite Group Inc., of Boston, for about $616 million.
American Family, which is based in Madison and is the largest insurer of homes and autos in Wisconsin, said its purchase of Homesite will close by the end of the year, pending regulatory approval.
Homesite is a direct writer of homeowners, renters and condominium insurance. American Family said the acquisition complements its exclusive agent network with a channel for customers who prefer to buy insurance directly. American Family said agents will remain the company's primary distribution method.
"This is about meeting customer preferences," Jack Salzwedel, American Family chairman and chief executive, said in a statement announcing the acquisition. "At American Family, we already have exceptional agents for customers who value the expertise and close personal attention our agents provide. Our agents are American Family's foundation, and they will continue to be. Homesite allows us to serve a different segment of customers who want to use direct channels to handle their insurance needs. We want to provide options for all customer preferences."
The purchase is the second time in less than a year that American Family has acquired a direct property-casualty insurance company. American Family purchased auto insurer Permanent General Companies at the end of 2012.
Homesite is privately owned by multiple entities and individuals. Owners include Alleghany Corp., Metalmark Capital through its management of the Morgan Stanley Capital Partners funds and The Plymouth Rock Company Inc.
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