Done Deal: Commercial Union-General Accident Merger

The completion of the worldwide merger between Commercial Union PLC and General Accident PLC was announced today. Both companies were removed from the London Stock Exchange this morning and replaced by CGU PLC. In the US, the merger means common ownership, as the US-based holding companies for Commercial Union and General Accident are now both owned by the newly formed CGU PLC.

"Beginning today, we start bringing these two companies together," says Bob Gowdy, president and CEO of the new organization. "That said, integration is a process. Initially, both CU and GA will continue in a business as usual mode, operating separately while working toward an official launch date next month." Adds Walter Farnam, incoming chairman, "The immediate challenge is shaping a new franchise from two companies with deep roots in this business, as well as long-standing commitments to the independent agency network. Our goal is to become the premier independent agent and broker property and casualty company in this country."

Gowdy has been CU's president and CEO since 1996, following executive appointments there since 1989. Farnam has been chairman of GA since 1991, where he had previously been president since 1985.

The new organization, headquartered in Boston, will be the 15th largest property and casualty company in the US, with $4 billion combined written premiums. Using some 6,000 independent agents, it will be licensed in all 50 states. Besides personal lines and small through middle market commercial capabilities, specialty products will include ocean marine, national and global accounts, agri, surety, and national programs. The company says operations will be managed through 13 regional profit centers, comprised of 44 branch offices throughout the US.

The targeted US launch date for the new, merged CGU enterprise is July 6, 1998.