USF&G; Corp. has decided to merge two of its biggest businesses -- personal coverage and small business insurance -- into one unit that will account for about one-third of the company's revenues.
The move represents the last major improvement effort of a 4 1/2 -year restructuring at the Baltimore-based insurance company.
It recognizes that the two lines are similar and are sold by the same types of insurance agents, the Baltimore company said. Together, the newly named Family and Business Insurance Group will represent more than $1 billion of the company's $3.25 billion in annual premiums.
Since late 1990, when Norman P. Blake Jr. took over as chairman and chief executive, USF&G; has gone through a wrenching restructuring, jettisoning extraneous businesses, leaving unprofitable states, and laying off more than 6,000 people.
Personal lines and small business insurance "is really the last thing we have to fix here," said Executive Vice President Gary C. Dunton, 39, the field operations chief who has been named president of the Family and Business group.
"They haven't been growing, they've been shrinking," Mr. Dunton said. "And they haven't been profitable, they've been losing money."
The company didn't break down profits for the two divisions, but last year revenues in personal lines, which consists of insurance for individuals, fell by almost 10 percent, while small business revenues dropped about 15 percent.
The key to running successful personal and small business lines is to cut costs by creating economies of scale and to bring convenience to the customers, Mr. Dunton said. "For those businesses our customer is essentially the agent, and the best thing we can do for the agents is to make doing business easier," he said.
The field operations, which consist of USF&G;'s branch and regional offices around the country, now are headed by Stephen W. Lilienthal, 45, who was promoted to senior vice president. Mr. Lilienthal, USF&G;'s underwriting director, worked in field operations at the Travelers before that. He reports to Executive Vice President Glenn A. Anderson, the head of commercial lines.
The company also announced that Anita Devan, vice president of USF&G;'s Denver branch, was promoted to senior vice president for middle market segments. She will lead the development of USF&G; products targeting contractors, manufacturing, and services industries.