GMAC Insurance Ownership Transfer Completed
March 3, 2010 – The full acquisition of the former U.S. personal lines insurance wing of General Motors, GMAC Insurance, by the American Capital Acquisition for an undisclosed sum has been completed, officials for GMAC Insurance and American Capital Acquisition announced today.
The sale initially was announced in October but awaited regulatory and other approvals. GMAC insurance operations will remain headquartered in Winston-Salem, North Carolina, and will retain the “GMAC Insurance” brand name for personal insurance lines while company officials come up with a new brand name. The company will be headed by its new chief executive, Larry Pentis, who recently was hired from Massachusetts-based property and casualty insurer the Commerce Group.
“Larry is a seasoned and successful insurance professional with over twenty-seven years of experience,” said Michael Karfunkel, chairman of American Capital Acquisition. “Larry has a collaborative leadership style emphasizing open and honest communication.”
Officials for insurance holding company AmTrust Financial Services last year joined with American Capital Acquisition to purchase GMAC Insurance and allocated an initial $42.5 million toward the purchase price. AmTrust was to pay up to $22.5 million more during the first quarter of 2010 to complete the acquisition of GMAC Insurance.
GMAC Insurance had received about $12.5 billion in U.S. taxpayer funds as part of the federal government’s efforts to stabilize the nation’s economy after the stock market collapse of 2008. One of the nation’s top 20 auto insurers, GMAC Insurance previously was the primary provider of personal lines of auto insurance for General Motors and Chrysler customers.
GMAC Insurance has a network of more than 10,000 independent agents and brokers doing business in 47 states. GMAC Insurance reported more than $1.5 billion in direct premiums written in 2008. GMAC Insurance sells auto insurance, motorcycle insurance, boat and personal watercraft insurance and some commercial lines.
Although GMAC Insurance now is owned by American Capital Acquisitions and AmTrust, GMAC still owns its international personal property and casualty insurance lines as well as its products-and-services group for insurance professionals. GMAC officials are selling some subsidiaries after posting losses for seven consecutive quarters and accepting federal bailout assistance. GMAC will continue using the GMAC Insurance brand name until deciding on another name to market its products to consumers, according to company officials.
AmTrust Financial Services is based in New York City and an international insurance holding company focused mostly on property and casualty markets. American Capital Acquisition is a United States-based, international capital-acquisition and investment firm providing financing and capital for corporate buyouts and acquisitions. American Capital has several regional offices in the United States and overseas.