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The Once and Future C&F - Xerox, the Accidental Savior
GE eventually put people from the industrial side in charge of ERC and Coregis. ERC blew up a few years later (asbestos, environmental and other long-term casualty liabilities) and was sold for parts to Swiss Re, although I think GE is still paying off long-term care insurance liabilities from that time. FGIC blew up during the 2008 credit meltdown. T here are not a lot of examples of stellar insurance company acquisitions. Consequently, some of the other C&F spin-offs also went from the frying pan right into the fire. For example, Constitution Reinsurance was sold by Exor to Gerling Global Re in 1998, and then Gerling Global Re went into run-off in 2002. In 1997, Industrial Indemnity was sold for $365 million to Fremont Insurance Company, which was insolvent by 2003. Viking and Guaranty National were absorbed into Sentry Insurance in 2005. The Resolution Group executed a $150-million management buy-out and was later sold to Fairfax, while Westchester was sold to Ace (now part of Chubb) for $338 million — and is still going strong. Let’s see, who do we have left? Oh yeah, Crum & Forster. It is probably not a coincidence that C&F was the last in line. While C&F was the largest of the business units, it was the least specialized — and the company had neglected its retail-produced standard lines middle market business while chasing after the more exciting specialty businesses that had all now been sold or run-off. C&F was still a fixer-upper. Still, Jay was very motivated to get Xerox out of the insurance business once and for all, so he started preparing for an IPO. The S-1 was filed and ready — and then, in the spring of 1998, Fairfax Financial showed up and offered $680 million for C&F. And a new era began.
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