Met Life to buy St. Paul division

$600 million deal is for insurer's business covering autos, homes

115 local workers affected

Acquisitions

July 13, 1999|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Metropolitan Life Insurance Co. announced yesterday that it is buying the personal insurance business of St. Paul Cos. Inc. for $600 million, but it could not say how many of the 1,700 St. Paul employees will be retained, including 115 in Baltimore.

The company is optimistic that many workers in St. Paul's auto and home insurance operations will be asked to stay on, said Joe Madden, a spokesman for Met Life Auto & Home in Warwick, R.I., a subsidiary of Metropolitan Life Insurance of New York.

"We will conduct an assessment of all our operations to see how everything will fit. As the deal comes together, we'll be in a better position to say," Madden said.

"But there are a lot of talented people joining us, and we are optimistic we will retain many of them."

All 1,700 St. Paul employees involved in the personal insurance business will be transferred to Met Life Auto & Homes.

The employees being transferred work mostly in the claims, processing and underwriting departments, said David Monfried, a St. Paul spokesman.

The Baltimore-area employees being transferred will continue to work in Mount Washington for the time being, Madden said.

Met Life In- surance Co. is the No. 2 U.S. life insurer.

The New York company said the purchase will make it the 12th-largest U.S. insurer of homes and autos, up from 20th, with annual premiums of about $2.7 billion.

The deal is expected to be completed in the fall.

The St. Paul's personal insurance operations had about $1.2 billion in premiums last year, mainly in auto and homeowners insurance.

The division had an underwriting loss of $160 million.

"It's been a source of trouble for them," said William M. Wilt, an analyst at Moody's Investors Service.

St. Paul is selling the operations to focus on insuring business property and liabilities, and on reinsuring other insurance companies.

As a result of the sale, St. Paul said, it will cut 500 to 600 jobs, the bulk of them at its headquarters in St. Paul, Minn.

St. Paul has about 1,200 employees in Baltimore and about 12,500 nationwide.

St. Paul shares rose $1.125 yesterday to close at $30.25.

Met Life is a mutual company, owned by its policyholders, and has no publicly traded stock.

Pub Date: 7/13/99

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