The Andover Companies has finalized its reorganization into a mutual holding company (MHC) structure, with the transition taking effect on Jan. 1, 2026.
The Massachusetts Division of Insurance approved the plan, which also received consent from policyholders of Merrimack Mutual Fire Insurance Company and Cambridge Mutual Fire Insurance Company.
As part of the restructuring, both Merrimack Mutual and Cambridge Mutual were converted from mutual insurers to stock insurance companies. The entities have been renamed Merrimack Insurance Company and Cambridge Insurance Company, respectively.
The two stock insurers are now direct, wholly owned subsidiaries of a newly established intermediate holding company, Merrimack Insurance Intermediate Holding Company.
Charles DiGrande (pictured above), president and CEO, testified during a regulatory hearing that the boards and management had been evaluating the companies' strategic position amid shifts in the property-casualty market, including new underwriting methodologies, data sources and analytical tools, loss prevention technologies, and evolving distribution channels.
DiGrande testified that while the applicants have no "current or anticipated need for additional capital," mutual insurers naturally have "limited options for raising capital." He noted this is particularly relevant when pursuing mergers, acquisitions, or investments, as mutual insurers cannot use stock as acquisition "currency."
Read more: Capital access defines insurers' strength
The move aligns with broader industry dynamics around capital flexibility. A Morningstar DBRS report found that US insurers' ability to access diverse sources of capital is increasingly defining their financial strength and competitive positioning.
At the end of 2024, US insurers held $217 billion in outstanding funding agreement-backed notes, marking a record high, alongside $161 billion in Federal Home Loan Bank financing.
Kevin J. Ouelette, vice president, secretary and general counsel, testified that the companies operate under a "unique structure" in which Merrimack, Cambridge and their subsidiary Bay State Insurance Company share common management under a pooling arrangement. He said the arrangement can create inefficiencies and is "less than optimal" for structural efficiency and tax planning.
Ouelette testified that the reorganizations "will in no way annul, modify or change" existing suits, rights, property interests, contracts or liabilities.
Policyholders who were members of Merrimack and Cambridge have automatically become members of the new MHC, retaining their mutual membership rights.
