Bermuda’s Everest Re Group is selling its U.S. crop insurance company, Heartland Crop Insurance Inc., to CGB Diversified Services Inc., a crop insurance, transportation and storage firm in Illinois.
Upon completion of the sale, Everest Re will provide quota share reinsurance capacity on the combined crop insurance portfolio of the Diversified/Heartland companies.
CGB offers crop insurance products and services to farmers across 38 states. With the acquisition of Heartland, CGB will grow its footprint in a number of key states.
This transaction is contingent upon all customary closing provisions, including all required regulatory and board approvals.
Chubb ($1.75 billion in premium including ACE) and Zurich ($1.74 billion) lead the multiple peril crop insurance field, according to the Insurance Information Institute, based on 2015 data. Everest Re is the tenth largest writer of crop insurance, writing $210 million in premium. CGB is the seventh largest with $556 million in written premium. Combined the firms will rank sixth.
The sale is yet another merger in the crop insurance field that is facing declining crop prices, uncertainty over government subsidies and concerns over extreme weather.
In April, Zurich American Insurance Co. completed its acquisition of Rural Community Insurance Services (RCIS), one of the country’s biggest crop insurance providers, from Wells Fargo. It reported about $1.9 billion in premiums in 2015, or about 20 percent of the estimated $10 billion market.
Last December, Cargill Inc. agreed to sell its crop insurance unit to Silveus Insurance Group.
In January, Bermuda-based Aspen Insurance announced a deal to buy AgriLogic Insurance Services. Monsanto Co. sold ts crop insurer to AmTrust last year and Deere & Co. sold its unit to Farmers Mutual in 2014.
Diversified Services is headquartered in Jacksonville, Illinois. It offers crop insurance, risk management and grain marketing expertise.
Everest Re Group provides reinsurance to property/casualty insurers in both the U.S. and international markets.
Related:
Topics Carriers Agribusiness
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