Spring Valley Mutual Co.
phasing out lines of insurance;
future of local office uncertain
Tuesday, July 23, 2013 3:22 AM
Spring Valley Mutual Insurance Company will be phasing out personal and farm insurance as the Florida-based Main Street America Group, which the local company became affiliated with in 2011, streamlines its business in Minnesota.
In taking steps to ensure it remains a stable personal lines market for its independent agent-customers and insureds throughout Minnesota, according to a news release from the company, Main Street America will stop writing new Spring Valley Mutual personal lines and farm business as of Aug. 15 and non-renew existing policies effective Oct. 1. Non-renewal notices will commence Aug. 1 to insured parties to meet the Oct. 1 effective date.
Although there is concern about the future of the Spring Valley Mutual Insurance Company office located in downtown Spring Valley, Mark Friedlander, director of corporate communications for Main Street America, said "no definitive decision or timeline has been established for closing our Spring Valley office."
The local office employs nine people and several have indicated they will no longer be working in Spring Valley after Oct. 1. Local manager Mike Soldan, when contacted by the Tribune, wouldn't verify the claims, saying that all statements must come from corporate communications.
The super-regional property/casualty insurance carrier entered the Minnesota market in 2011 when it formed an affiliation with Spring Valley Mutual Insurance Company. Last year, Austin Mutual Insurance Company became an affiliate of Main Street America. Austin Mutual is based in Maple Grove, Minn., a suburb of the Twin Cities.
"Over the past several years, we have experienced profitability issues with our Spring Valley Mutual personal lines and farm products. We also have dealt with 'brand confusion' amongst our independent agents and their customers because our Spring Valley Mutual and Austin Mutual affiliates have competing homeowners' products," said Jeff Kusch, president of Main Street America's western region, now headquartered in Maple Grove.
"It has become apparent that we need to streamline our homeowners' products in Minnesota so that we can sustain profitable growth and remain a stable market for our agents and their customers," Kusch added. "Additionally, because Spring Valley Mutual's farm business does not fit Main Street America's niche, we have determined it is not in our best interests to dedicate company resources to this product line. We had hoped to find a buyer for this book of business. Unfortunately, we have not been able to do so."
Austin Mutual will continue to offer homeowners'-related products in Minnesota through its statewide network of independent agents. Main Street America's personal lines changes will have no impact on the company's commercial lines product suite in Minnesota, which was launched last year. Its flagship Main Line Business Owners Policy will continue to be written on Spring Valley Mutual paper. The company also offers commercial auto, workers' compensation and commercial umbrella products to "Main Street" businesses throughout the state.
Spring Valley Mutual was founded in 1883 and provided farm owners' and homeowners' coverage to approximately 6,000 policyholders throughout Minnesota before the affiliation with Main Street America. When that took effect, Main Street America took over management oversight of Spring Valley Mutual and replaced the local board of directors with its own board.
Main Street America had approached Spring Valley Mutual three years before the affiliation took place in 2011, but the board at the time declined the offer. However, when approached again, the board agreed after experiencing some reductions due to multiple tornadoes in Minnesota three years in a row, an unusual trend.
With roots dating back to 1923, The Main Street America Group is a super-regional insurance company which writes business through its nine property/casualty insurance carriers on the East Coast and upper Midwest. Based in Jacksonville, Fla., Main Street America offers a wide range of commercial and personal insurance, as well as fidelity and surety bond products, to individuals, families and businesses throughout the United States.