We’d Like to Change our Corporate Structure.

The Andover Companies would like to reorganize into a mutual holding company (MHC) structure.

What Is the Change?

The Andover Companies’ board of directors has approved a strategic initiative to reorganize into an MHC structure, with our current underwriting companies (Merrimack Mutual Fire Insurance Company, Cambridge Mutual Fire Insurance Company, and Bay State Insurance Company) becoming subsidiaries of the MHC. Just as The Andover Companies operate today, we will continue to be governed by our policyholders (of Merrimack and Cambridge) and provide insurance coverage through our independent agency partners. Policyholders who are members of Merrimack and Cambridge will automatically become members of the new MHC.

To effectuate this reorganization, Merrimack and Cambridge will each form an MHC and an intermediate stock holding company. Additionally, Merrimack and Cambridge will convert from mutual to stock insurance companies and become indirect, wholly owned subsidiaries of their respective MHCs. Simultaneously, the two MHCs will merge and the two intermediate stock holding companies will merge, with one of each surviving. Bay State will remain a subsidiary of converted Merrimack.

Why the Change?

The reorganization is intended to strengthen The Andover Companies’ organizational structure and ensure long-term success. It preserves our mutual status, remaining owned by our policyholders, while enhancing our ability to grow, adapt, and compete in a continually evolving insurance marketplace. This reorganization reflects years of careful planning, which has been focused on supporting our ability to deliver high-quality insurance solutions for years to come.

Specifically, an MHC structure will benefit The Andover Companies and our policyholders by:

• Preserving our mutual status while allowing for greater organizational flexibility;
  
• Improving access to capital and financing opportunities, as needed or desired, to support long-term growth;
• Providing greater agility to pursue strategic opportunities, such as partnerships or acquisitions; and
  
• Strengthening our competitive position by enhancing operational efficiency and financial adaptability.
  

What Does This Change Mean to Our Policyholders?

Under the plan of reorganization, Merrimack and Cambridge policyholders will retain their mutual membership rights by automatically becoming members of the new MHC. This reorganization will not affect your policy, coverage, premiums, or the quality of service you receive, as your policy will continue to be insured by the converted Merrimack or converted Cambridge. Further, our commitment to working with trusted independent agents remains steadfast, seeking to ensure that you continue to receive exceptional service.