USF&G; Corp., the beleaguered Baltimore insurance company, will terminate 424 workers in Texas as it shuts down most of its operations in that state.
In January, USF&G; announced a massive cost-cutting effort that included the elimination of 900 jobs, including 360 workers in its Baltimore operations.
Officials of USF&G;'s main insurance subsidiary, United States Fidelity and Guaranty Co., met with Texas Insurance Commissioner Philip Barnes yesterday morning and told him that the company's operation will be discontinued. USF&G; said it has lost $300 million in Texas during the last 10 years, using statutory accounting standards. The company last made a statutory profit in Texas in 1980, according to USF&G; spokeswoman Kerrie Burch-DeLuca.
Barnes issued a statement of regret, but said: "Company officials assure me that this strategic decision to withdraw from most commercial and personal lines in Texas was part of a national strategy of repositioning the company in markets where USF&G; has a competitive advantage."
Lee Jones, assistant director of information services for the Texas State Board of Insurance, said USF&G; had 124,629 policies in force in various lines in Texas in 1989, the most recent year for which figures are available. He said the company will retain its business in certain surety lines and reinsurance.
USF&G;'s Texas results for 1989 show the company collected more premiums than it paid out in losses, Jones said.
Texas Gov. Ann Richards ran on an insurance-reform platform, but Burch-DeLuca said the pull-out was not a result of Richards' election.
USF&G; plans to close its Houston and San Antonio offices in 60 days, leaving only the claims and audit functions. Operations will be transferred to the Dallas branch office, the company said.
Ultimately, the company will close the Dallas branch as well as sub-offices in Austin, Beaumont, El Paso, Fort Worth, Longview, Lubbock and Midland, the company said.
USF&G; said 134 people will be terminated due to the closing of the Houston and San Antonio offices and another 290 will lose their jobs when the rest of offices close.
The USF&G; press release on the matter did not attribute the actions to any corporate official, such as Norman P. Blake Jr., chairman and chief executive officer, who was appointed last November.
"We understand and regret the impact that this action will have on our Texas employees and their families," USF&G; said in a message to the affected offices.
The terminated employees are to receive severance benefits.
Excluding the pending Texas reductions, USF&G;'s work force now stands at about 10,900 nationwide, with 1,940 of those workers in the Baltimore area.
No Baltimore employees will lose their jobs in connection with the closing of the Texas operations, Burch-DeLuca said.
However, after the company completes a strategic review, more terminations are expected in the Baltimore area at the end of this month.