The Hartford's First State Management Group And The Berkshire Hathaway Group Team Up In The Surplus Lines Insurance Market

Strength and reputation of two leading insurer groups leveraged in a combination policy offering; greater coverage limits now available for higher risk businesses

Hartford, CT - The Hartford Financial Services Group, Inc., aprovider of investment and insurance products, announced today that its First State Management Group has formed a strategic relationship with certain members of the Berkshire Hathaway group of insurance companies to offer expanded levels of surplus lines commercial property insurance.

Surplus lines coverage is needed for difficult, unusual or high risk accounts that standard or "admitted" insurance companies do not write. Examples may include vacant buildings, manufacturing facilities in remote locations or habitational business, such as apartment buildings. The coverage is also commonly purchased for properties located in catastrophe-prone regions of the country.

Under the agreement, First State, an indirect wholly-owned underwriting manager of The Hartford, will leverage the capacity of The Hartford's subsidiary surplus lines insurance companies with capacity from the Berkshire Hathaway Group's National Fire & Marine Insurance Company, National Indemnity Company and National Indemnity Company of the South. This approach will give wholesale brokers access to an enhanced policy offering that provides high levels of property coverage backed by two trusted names. It will also promote greater convenience for customers looking to satisfy their coverage needs through a single source.

First State, which has had a long and successful presence in the surplus lines market, will be expanding its position by increasing the total amount of business it can write. The Berkshire Hathaway Group, whose companies are leading providers of insurance and reinsurance, will expand its participation in the primary surplus lines market by leveraging The Hartford's established resources and expertise in this field. Both companies see this as a win-win relationship for their organizations and surplus lines customers.

"We're thrilled to be teaming up with such a respected name in the property and casualty insurance industry," said Judith Patterson, executive vice president of First State. By leveraging existing underwriting capacity with The Berkshire Hathaway Group, we can reach additional surplus lines customers and provide greater capacity to existing policyholders. This opportunity will also help our brokers better meet their clients' needs while enhancing our competitive position in the market."

Policies under this arrangement will be offered on a quota share subscription, or "combination" basis, meaning that each company is responsible for a certain portion of the risk. In most cases, that risk will be shared equally. Each company will be severally, but not jointly, liable for its own respective participation.

Coverage limits, on average, are expected to be twice as high as those previously made available by First State. Depending on the risk, limits could reach $25 million.

First State will manage all underwriting, distribution and claims aspects of this business for both the Berkshire Hathaway Group and The Hartford insurers. First State will also be the contact for all correspondence, questions, and claims reporting.

SOURCE: The Hartford Financial Services Group, Inc.