Fremont Michigan InsuraCorp, a Michigan-based property and casualty insurance company, has signed a letter of intent regarding a proposed strategic alliance with Northern Mutual Insurance Company, a mutual insurer.
Under the terms of the letter of intent, Northern intends to pursue a demutualization with the goal of converting to a stock insurer.
The terms of the proposed alliance are subject to Northern and Fremont entering into a mutually acceptable definitive agreement of the terms, including the consideration to be paid.
In addition, the alliance is contingent upon the approval by the Commissioner of the Michigan Office of Financial and Insurance Regulation (OFIR) of a plan of conversion and Fremont’s acquisition of all of the stock of the converted insurer. However, a plan of conversion has not yet been filed with OFIR.
In 2009, Northern had net written premiums of $8.9m and total assets of $23.7m at December 31, 2009, both on a statutory basis. Fremont had net written premiums of $55.6m in 2009 and total assets of $89.4m ($105.3 million on a GAAP basis) at December 31, 2009, on a statutory basis.
As previously reported, for the first quarter ended march 31, 2010, Fremont posted revenues of $14.9 m, up 9.4% compared to same quarter in 2009, and net income more than tripled, reflecting strength in premiums and the continued loyalty of agents and policyholders.