USF&G

USF&G was an American insurance company headquartered in Baltimore, Maryland. It began business in 1896 as the United States Fidelity and Guaranty Company, a name that reflected its original emphasis on fidelity and surety bonds. The company was founded during a period when commercial expansion, public works, banking, and corporate activity were creating demand for guarantees that protected employers, governments, lenders, and other counterparties against fraud, nonperformance, or financial failure. During its early decades, USF&G expanded beyond Maryland and developed a national presence in the surety and fidelity business. In 1902, it acquired a controlling interest in The Lawyer's Surety Company of New York, although that company continued operating separately rather than being merged into USF&G. The insurer was also involved in industry discussions about bond pricing and rate competition. Its history included litigation in the United States Supreme Court, including United States Fidelity and Guaranty Co. v. United States ex rel. Struthers Wells Co. and Jennings v. United States Fidelity and Guaranty Co. The company grew into a substantial insurer. In 1921, it reported income of approximately $27.6 million and assets approaching $34 million, while its Baltimore and New York real estate was valued at roughly $2.54 million. The Great Depression exposed weaknesses in several important lines. Following the 1929 stock-market collapse, company president R. Howard Bland reported unusually heavy losses, particularly in fidelity and surety insurance and automobile liability. USF&G also experienced a temporary suspension of trading on the Baltimore Stock Exchange in 1935 over technical matters before the Securities and Exchange Commission permitted trading to resume. USF&G remained closely associated with Baltimore. In 1970 it constructed the 37-story USF&G Building near the city's Inner Harbor. The pink-granite-clad tower became a prominent Baltimore landmark and was later renamed the Transamerica Tower. The company also owned and used the former Mount Saint Agnes College campus from the early 1970s through subsequent decades; the property was eventually acquired by Johns Hopkins University in 2003. In July 1981, the insurer reorganized its insurance operations under a holding-company structure and adopted the shorter USF&G name. The reorganization accompanied an aggressive diversification strategy. During the 1980s, however, many of the company's noncore businesses and investments produced serious financial difficulties. By 1990, USF&G was close to insolvency. Norman Blake became chief executive that year and led a rapid restructuring. He divested business units, replaced much of the senior management team, and redirected the company toward its core insurance operations. The turnaround restored profitability by 1992. USF&G also used sports sponsorship to build public visibility. It sponsored the New Orleans Open golf tournament from 1981 through 1991, with the event known first as the USF&G New Orleans Open and later as the USF&G Classic. The company sponsored the Sugar Bowl from 1987 to 1995 and supported the Arrows Formula One team from 1986 to 1990. It also sponsored televised United States Club Lacrosse Association championship games in 1988 and 1989. In January 1998, The Saint Paul Companies acquired USF&G in a stock transaction valued at $3.9 billion, including assumed debt. Following the transaction, USF&G operated as a subsidiary of St. Paul Fire and Marine Insurance Company. The standalone USF&G corporate entity and brand therefore ceased to exist as an independent insurer, although its operations and obligations were absorbed into the acquiring insurance group.

The United States Fidelity and Guaranty Company was organized in Baltimore on March 19, 1896, and began operations on August 1 of that year. John Randolph Bland was its principal founder. The original business centered on fidelity and surety products, which guaranteed the performance or honesty of individuals, contractors, employees, and other parties. These products made the company part of the expanding American commercial and infrastructure economy. USF&G developed operations beyond Maryland during the early twentieth century. In May 1902, it acquired a controlling interest in The Lawyer's Surety Company of New York, though the acquired company remained in business as a separate entity. In November of the same year, USF&G joined two other major Baltimore bonding companies in an agreement intended to end aggressive rate cutting in the bond market. The company also faced legal scrutiny and participated in significant litigation, including a United States Supreme Court case in 1908 and another in 1935. By 1921, USF&G had become a sizeable insurer. Its reported income was approximately $27.6 million and its assets were close to $34 million. Real estate holdings in Baltimore and New York were valued at approximately $2.54 million at the end of that year. The economic collapse beginning in 1929 caused substantial losses, especially in fidelity and surety insurance and automobile liability. In 1935, the company was temporarily suspended from trading on the Baltimore Stock Exchange over technical issues, but the SEC subsequently allowed trading to resume. The company maintained a strong physical presence in Baltimore. It built the 37-story USF&G Building in 1970 near the Inner Harbor. The tower became an important element of the city's skyline and later took the name Transamerica Tower. USF&G also owned and used the former Mount Saint Agnes College campus from the early 1970s into later decades. In July 1981, the company formed a holding company for its insurance businesses and adopted USF&G as its corporate name. It then diversified rapidly into multiple businesses. Much of that diversification performed poorly during the 1980s, leaving the company in serious financial difficulty and close to bankruptcy by 1990. Norman Blake became chief executive and implemented a turnaround based on asset and business-unit disposals, extensive management changes, and renewed concentration on insurance. The strategy restored strong profitability by 1992. The USF&G name also appeared prominently in sports sponsorship. The company backed the New Orleans Open golf tournament from 1981 until 1991, sponsored the Sugar Bowl from 1987 to 1995, and supported the Arrows Formula One team from 1986 to 1990. These activities complemented its corporate identity during the period when it was rebuilding its business. In January 1998, The Saint Paul Companies acquired USF&G in a transaction involving stock valued at $3.9 billion and assumed debt. USF&G thereafter operated as a subsidiary of St. Paul Fire and Marine Insurance Company. The acquisition ended the independent USF&G brand and corporate organization.

• 1998

  Acquired by The Saint Paul Companies

  [1]USF&Gen.wikipedia.org

  The Saint Paul Companies acquired USF&G for stock valued at approximately $3.9 billion and assumed debt.

• 1992

  Return to profitability

  [1]USF&Gen.wikipedia.org

  The restructuring program had restored the company to high profitability by this year.

• 1990

  Turnaround begins under Norman Blake

  [1]USF&Gen.wikipedia.org

  Norman Blake became chief executive and began divesting noncore units and refocusing the company on insurance.

• 1981

  Corporate name changed to USF&G

  [1]USF&Gen.wikipedia.org

  The insurer established a holding-company structure for its insurance operations and adopted the USF&G name.

• 1970

  USF&G Building completed in Baltimore

  [1]USF&Gen.wikipedia.org

  The company built a 37-story tower near Baltimore's Inner Harbor that became a major city landmark.

• 1930

  Heavy losses reported after the market crash

  [1]USF&Gen.wikipedia.org

  President R. Howard Bland reported unusually heavy losses in fidelity, surety, and automobile liability lines after the 1929 market upheaval.

• 1902

  Expansion into New York surety business

  [1]USF&Gen.wikipedia.org

  USF&G acquired a controlling interest in The Lawyer's Surety Company of New York, which continued operating separately.

• 1896

  Company organized and begins operations

  [1]USF&Gen.wikipedia.org

  The United States Fidelity and Guaranty Company was organized in Baltimore on March 19 and commenced business on August 1.

A diversified American property-and-casualty insurer whose historical identity was rooted in fidelity and surety bonding, later repositioned around core insurance operations after a troubled diversification period in the 1980s.

• Insurance · 1896

  Fidelity insurance

  Fidelity coverage was part of USF&G's original business and protected employers or other insured parties against specified dishonest or fraudulent acts. It remained one of the company's principal historical lines, particularly during its early growth as a bonding company.

• Insurance · 1896

  Surety bonds

  Surety bonding guaranteed contractual or other obligations and was central to USF&G's identity. The company served commercial and public-sector needs through a business that expanded from Baltimore into other American markets.

• Insurance

  Automobile liability insurance

  Automobile liability was among the lines in which USF&G reported significant losses after the 1929 market upheaval. It formed part of the company's broader property-and-casualty insurance portfolio.

• 1988United States Club Lacrosse Association championship sponsorship

  United States

  USF&G sponsored the United States Club Lacrosse Association Championship Game, which was televised.

  Outcome. The sponsorship covered the 1988 and 1989 championship games.

  Source
• 1987Sugar Bowl sponsorship

  United States

  USF&G sponsored the Sugar Bowl, a postseason college football game held in New Orleans.

  Outcome. The sponsorship continued through 1995.

  Source
• 1986Arrows Formula One sponsorship

  International

  USF&G sponsored the Arrows Grand Prix International Formula One team as part of its broader corporate visibility program.

  Outcome. The sponsorship ran through 1990.

  Source
• 1981USF&G New Orleans Open sponsorship

  United States

  USF&G became title sponsor of the New Orleans Open golf tournament. The event used the USF&G New Orleans Open name in its first sponsored year and later became the USF&G Classic.

  Outcome. The sponsorship continued through 1991; the tournament later became the Zurich Classic of New Orleans.

  Source

• 1998

  Accepted acquisition by The Saint Paul CompaniesM&A

  Background

  The Saint Paul Companies pursued the acquisition of the Baltimore-based insurer.

  Action taken

  The Saint Paul Companies acquired USF&G in a stock transaction and assumed debt.

  Aftermath

  USF&G became a subsidiary of St. Paul Fire and Marine Insurance Company, ending its independent corporate existence.

  Transaction value. $3.9 billion in stock value plus assumed debt (January 1998)

  Source

• 1990

  Refocused on core insurance operationsStrategy

  Background

  USF&G was close to bankruptcy after weak performance across diversified businesses.

  Action taken

  Chief executive Norman Blake sold business units, replaced much of the senior management, and concentrated the company on its core insurance operations.

  Aftermath

  The restructuring returned USF&G to high profitability by 1992.

  Source

• 1981

  Adopted a holding-company structure and the USF&G nameStrategy

  Background

  The insurer reorganized its insurance businesses during a period of expansion and diversification.

  Action taken

  It formed a holding company for its insurance operations and changed its name from United States Fidelity and Guaranty Company to USF&G.

  Aftermath

  The company subsequently diversified rapidly, but encountered substantial financial difficulties in many businesses during the 1980s.

  Source

1. 1USF&Gen.wikipedia.org