January 8, 2024
Frederick Mutual Group, Inc. (“Frederick Mutual”) is pleased to announce that it has raised significant long-term capital from Mutual Capital Investment Fund, LP (“MCIF” or the “Fund”) that will be used to augment Frederick Mutual’s surplus and support its commercial lines business. As part of the transaction Frederick Mutual has made the strategic decision to exit personal lines entering into a renewal rights agreement related to that line of business. Frederick Mutual, founded in 1843 and one of the country’s oldest insurance companies, will remain an independent mutual insurance company with Nancy Newmister as its Chief Executive Officer.
“It has been a pleasure to work with MCIF on this transaction. As the Board of Directors considered alternatives it quickly became clear that partnering with MCIF was in the best interests of the company and its constituents. The MCIF team demonstrated an understanding of our business and culture which makes sense since MCIF was founded by a mutual insurance company. Although Frederick Mutual has faced challenges on many fronts over the past few years, the MCIF team recognized Frederick Mutual’s value and its potential,” said Nancy Newmister.
Jason Wolfe, President and CEO of the Fund’s management company, Mutual Capital Investment Advisors, LLC stated, “We are excited to provide capital to Frederick Mutual at this critical time and look forward to being a part of Frederick Mutual’s future.” In addition to his role with the Fund, Mr. Wolfe is the lead independent director of Forge Group, Inc. and became the Chairman of Frederick’s Board of Directors upon the closing of MCIF’s investment in the company. Mr. Wolfe further noted, “I’m looking forward to working with Nancy and her team as Frederick Mutual focuses on its commercial lines business. MCIF is continuing to execute its mission of providing patient, mutual-friendly capital to insurance companies and is well-positioned to provide substantial capital to other mutual insurance companies.”
Founded on December 15, 1843, Frederick Mutual has continuously operated for 181 years as a mutual insurance company serving policyholders, initially in Maryland, and subsequently expanding the operating territory into Pennsylvania, Virginia, Delaware, D.C., North Carolina and South Carolina. We work with respected local independent agents who share our values of delivering innovative and competitive products to our policyholders.
In 2022, Frederick Mutual Insurance Company reorganized from a mutual insurance company to a mutual insurance holding company structure, in accordance with Maryland law and pursuant to policyholder and board approval. Through the reorganization, Frederick Mutual Holdings, Inc., a mutual insurance holding company, and Frederick Mutual Group, Inc., an intermediate holding company, were formed. Frederick Mutual Insurance Company became a direct
subsidiary of Frederick Mutual Group and a wholly owned indirect subsidiary of Frederick Mutual Holdings. Under the new mutual insurance holding company structure, all existing and future policyholders of Frederick Mutual Insurance Company retain their mutual ownership rights and automatically become members of Frederick Mutual Holdings.
Mutual Capital Investment Fund, LP was formed to provide mutual insurance companies with a capital source that is generally more ‘mutual-friendly’ than other options. MCIF is sponsored by Mutual Capital Group, Inc. (“MCG”) based in Wyalusing, Pennsylvania. Mutual Capital Group, Inc. has a mutual insurance heritage that spans almost 150 years, and brings a level of understanding, experience, and support to clients that is beyond compare. As a result of being formed by, and having MCG as its parent, the Fund has insights into the challenges and opportunities mutual insurers face today, with the ability to partner with companies it invests in, while appreciating their culture and independence.