OneBeacon Insurance Group Ltd. is selling its Essentia Insurance Co. unit to Markel Corp., according to company announcements this morning.
Essentia focuses on the collector car and boat business that the company writes through Traverse City, Mich.-based Hagerty Insurance Agency and Hagerty Classic Marine Insurance Agency. OneBeacon said it will retain the loss reserves and unearned premium reserves associated with the business written prior to the sale of Essentia and run them off in the normal course.
OneBeacon said it anticipates recording a $23 million pretax gain on the sale ($15 million after tax) when the transaction is completed. The deal is subject to regulatory approvals and is expected to be completed in January 2013.
Essentia, under Markel ownership, will remain the underwriting company for Hagerty’s collector car and boat business.
Hagerty has not been sold and continues to be a privately-owned family business. Hagerty offers insurance for classic cars, vintage boats, motorcycles and related automotive collectibles.
OneBeacon CEO Mike Miller said the OneBeacon has partnered with Hagerty for the past five years, but the two were unable to reach mutually acceptable terms to extend the relationship. “We believe the economics associated with the termination of the Hagerty agreement and the related sale of Essentia fairly compensate OneBeacon, marking the end to what has been a profitable venture,” Miller said.
Markel said Essentia will continue to underwrite insurance exclusively for Hagerty Insurance Agency and Hagerty Classic Marine Insurance Agency.
Markel said the transition is intended to be seamless for existing Hagerty customers and agents. Both groups will continue to receive the same specialized products, service offerings and claim handling. Insurance agents will continue to work with Hagerty as they traditionally have.
“Our new relationship with Markel is a natural fit because we are both exclusively focused on specialty and niche insurance markets and are dedicated to providing the best protection to all types of collector vehicles,” said McKeel Hagerty, CEO of Hagerty Insurance.
OneBeacon Insurance Group Ltd. is a Bermuda-domiciled holding company. OneBeacon’s underwriting companies offer a range of specialty insurance products sold through independent agencies, regional and national brokers, wholesalers and managing general agencies.
Glen Allen, Va.-headquartered Markel underwrites specialty insurance products.