Arizona’s provider of workers’ compensation insurance since 1925, announced a definitive agreement to acquire Pacific Compensation Insurance Company (PacificComp), a California-based workers’ compensation carrier, from Alleghany Insurance Holdings LLC, a wholly-owned subsidiary of Alleghany Corporation (NYSE: Y), for $150 million in cash. The combined book of underwriting business for the two companies will represent approximately $400 million in premium and a combined asset base of nearly $4.1 billion, with $1.5 billion in policyholder surplus.
CopperPoint was founded in 1925 and is headquartered at CopperPoint Tower in Phoenix and has a presence statewide. Today it provides workers’ compensation insurance to more than 12,000 businesses, as well as offers other business insurance products, including property and casualty coverage. It holds $1.35 billion in surplus and more than $3.4 billion in assets with no debt. The family of CopperPoint Insurance Companies and its subsidiaries are rated A- Excellent XII by A.M. Best.
CopperPoint was privatized and converted to a mutual insurance company in 2013 with a vision of geographic expansion and product diversification. In 2016, Marc Schmittlein, a 30-year veteran of The Travelers, was brought on by the board of directors as CopperPoint CEO to help the company take the next step in its journey to become a regional mutual commercial lines company.
Pacific Compensation Insurance Company provides workers’ compensation insurance coverage exclusively through independent insurance brokers for California companies. The company was formerly known as Employers Direct Insurance Company and changed its name to Pacific Compensation Insurance Company in April 2010. The company was incorporated in 2002 and is based in Westlake Village, California with an additional address in Agoura Hills, California. Pacific Compensation Insurance Company operates as a subsidiary of Alleghany Insurance Holdings LLC.
The acquisition of PacificComp represents a significant milestone in CopperPoint’s geographic expansion and diversification initiatives. PacificComp brings a proven track record, strong underwriting discipline and focused approach to serving businesses in the California market. The two companies share complementary strengths, including expertise in workers’ compensation and a commitment to providing the highest quality customer experience through select independent agents.
“We are creating a family of insurance companies built on strong business relationships and best-in-class service,” said Marc Schmittlein, President & CEO of CopperPoint. “PacificComp brings experienced professionals with deep California market expertise and a solid book of business that will undoubtedly provide us with a sound platform for growth.”
“In joining CopperPoint, we have found an ideal strategic and cultural fit for our employees, broker partners and policyholders that will allow us to continue our service to the market without interruption and provide us with the ability to expand the products and services we offer,” said Jan Frank, CEO of PacificComp. “Our companies share a strategic vision for the continued expansion of the business and an approach to the marketplace that makes me and the PacificComp management team excited to become part of the CopperPoint family of companies.”
Schmittlein added, “A key tenet of our value proposition comes from our proximity to customers, their business, their markets and their communities. Acquiring PacificComp builds on that core strength and is a natural fit for our policyholders growing West, particularly into California.”
Upon closing, PacificComp will continue to operate under its current name as part of the broader CopperPoint family of companies. Terms of the agreement include the purchase of adverse development reinsurance cover on PacificComp’s pre-acquisition claims. The transaction is expected to close at the end of the year subject to customary closing conditions and regulatory review and approvals.