In what the two companies are calling an “innovative model” of sharing resources while maintaining autonomy and identity, a Virginia and Massachusetts mutual insurance firm have created a new alliance.

The Rockingham Group, headquartered in Harrisonburg, Va., announced it is forming an alliance with The Norfolk & Dedham Group effective Jan. 1, 2010, “to strengthen their collective competitiveness through improved scale, efficiency and diversification,” according to a statement. Unlike a traditional merger, the new partnership is “an innovative model,” the firms said, of how mutual insurers can benefit from one another yet retain their own individuality.

Each company will maintain its own chief executive officers and no staff reductions are planned, the firms said.

The Rockingham Group consists of Rockingham Mutual Insurance Company, Rockingham Casualty Company, and Rockingham Mutual Service Agency, Inc.

Established in 1869, the company provides personal and small business insurance products to more than 50,000 policyholders in Virginia and Pennsylvania.

The Norfolk & Dedham Group, headquartered in Dedham, Mass., consists of Norfolk & Dedham Mutual Fire Insurance Company, Dorchester Mutual Insurance Company, and Fitchburg Mutual Insurance Company.

The company has more than 120,000 policyholders in six states, including New Jersey and New York.

Neal Menefee

The firms said the geographic diversity of the alliance’s customer base will enable them to spread risk and mitigate the impact of large losses, such as those associated with weather-related catastrophes. Another goal of the partnership is to create “a stronger and more diverse organization utilizing efficient and streamlined business processes,” according to the companies.

Neal Menefee, president and CEO of the Rockingham Group, said in a statement “companies that not only understand, but also take action to deal with the dramatic changes occurring in the business, will be in a better position to take care of their customers’ future needs.”

Timothy Hegarty, president and CEO of The Norfolk and Dedham Group, said the new alliance “demonstrates how two mutual insurance companies with long-standing traditions can demonstrate farsighted thinking in preparing themselves to prosper in a more competitive and changing business environment.”

In addition to new products and services introduced to policyholders, the alliance will also provide an environment to attract and retain talented personnel to service the more than 170,000 policyholders between the two companies.

Menefee and Hegarty will oversee their respective companies and each will maintain independent boards of directors. The companies will also continue to be regulated by regulators in Virginia and Massachusetts.

Both companies currently have an A (Excellent) rating from A.M. Best.