Nationwide To Buy CalFarm From Zenith National

Nationwide Mutual Insurance Company and Zenith National Insurance Corp. say they have entered into a definitive agreement for Nationwide to purchase CalFarm Insurance Company. The deal is subject to regulatory approvals and customary conditions. The closing is expected to occur during the second quarter of this year.

CalFarm, which has the endorsement of the 78,000-member California Farm Bureau Federation, offers farmowner, commercial, personal and health insurance and is the largest farmowner insurance provider in California, based on policy count. CalFarm, headquartered in Sacramento, has some 350 property and casualty agents and a statewide network of health insurance brokers who sell its products.

Richard D. Crabtree, Nationwide Mutual's president and chief operating officer, said, ``We are especially pleased with this contemplated acquisition because CalFarm's close ties to the California Farm Bureau Federation are consistent with Nationwide's deep ties to the agricultural community. This contemplated acquisition is another solid step forward in Nationwide's growth strategy in the West, especially in the important California market.''

Nationwide, which has had a western direct marketing operation since 1958, boosted its western presence in 1997 when it acquired TIG Holdings' personal lines operations, headquartered in Battle Creek, Mich., and last year when it acquired the Allied Group and Allied Mutual Insurance Company, based in Des Moines, IA.

This acquisition is an excellent fit, Crabtree said, because of Nationwide's heritage. Nationwide was started by Ohio Farm Bureau leaders in 1926 as a mutual insurance company owned by policyholders.

Crabtree said that when the acquisition is consummated, CalFarm would report to Douglas L. Andersen, who is the head of Nationwide's independent agency operations and Allied's president.

Andersen said, ``We are excited about bringing together these two quality companies in the California insurance market. This purchase will benefit the California Farm Bureau Federation and its members and CalFarm agents. We will offer a solid array of competitive insurance products that should be very attractive to customers.''