Nationwide Mutual Insurance Co., the eighth-largest U.S. personal auto insurer, is in talks to buy Pennsylvania-based rival Harleysville Group Inc. and its parent firm, said people with knowledge of the negotiations.
The companies may be days away from signing a deal, said the people, who spoke on condition of anonymity because the discussions are private. Talks could still collapse, they said. Harleysville Group had a market value of about $690 million as of yesterday. Its majority shareholder, Harleysville Mutual Insurance Co., is owned by its policyholders, as is Nationwide.
For Nationwide Chief Executive Officer Stephen Rasmussen, a purchase of Harleysville would be the first large acquisition since he took the job in 2009. Columbus, Ohio-based Nationwide would boost sales by adding home, auto and business-insurance customers in the Midwest and Eastern U.S.
Joe Case, a spokesman for Nationwide, declined to comment, as did Harleysville's Randy Buckwalter. The combined Harleysville insurance companies had a statutory surplus, a measure of assets minus liabilities, of $1.3 billion as of June 30, according to an estimate from SNL Financial.
Nationwide generated $14.4 billion in property-casualty premiums last year, a decline of about 4 percent from 2009, according to the company's annual report. Harleysville, based in the city of the same name, had policy sales of about $1.1 billion at the pooled companies in 2010.
Harleysville Mutual traces its roots to 1915 as an association to protect against auto theft.