Commercial Union Agrees to Buy National Farmers Union

Commercial Union (CU), the U.S. parent of Commercial Union Insurance Companies, and Farmers Union Insurance Acquisition Corporation, the holding company of National Farmers Union Property and Casualty Companies (NFU), have agreed for CU to acquire NFU for $118 million. Under the terms of the agreement, NFU will continue its operations as a distinct company, retaining its name, products and organizational structure.

Bob Gowdy, president of CU, explains their interest: "National Farmers Union (NFU) is a well regarded agency company which has consistently succeeded in rural personal lines and commercial markets, primarily in regions where CU has minimal presence. Their brand recognition and proven track record in the rural communities are impressive. This commitment to the small account presents a natural extension in markets we like and understand." CU entered the agricultural insurance sector last year when it expanded its niche insurance operations with the acquisition of CNA Agriculture's farm and ranch business.

Jake Krull, president of NFU, says, "We value the legacy which CU represents in our industry, and especially their commitment to the agriculture and rural marketplace. Having their strength and corporate support will significantly enhance our growth potential in '98 and beyond."

Headquartered in Aurora, CO, NFU brings writings in communities that complement CU's exposures, with business principally in the rural areas of 12 mountain, plains and midwestern states. As of year-end 1997, NFU's written premium was $166 million, including $44 million of crop insurance.