OneBeacon, QBE
OneBeacon Insurance Group completed its renewal rights and asset sale agreement to transfer its agricultural division to QBE the Americas, a wholly owned division of QBE Insurance Group Ltd., for approximately $32 million. From offices in Kansas, the new division will write farm and ranch, commercial agricultural and companion lines throughout the U.S. with a concentration in 12 core states. QBE Agri anticipates it will write $90 million in premium in 2007. Coupled with the acquisition of National Farmer’s Union Insurance Co. last year, QBE said its agricultural-based business will now be over $300 million in premium. The Americas division, headquartered in New York, does business through eight companies. Headquartered in Boston, Mass., OneBeacon Insurance Group is wholly owned by White Mountains Insurance Group Ltd.
Praetorian, Alea
Praetorian Financial Group Inc. acquired Alea North America Specialty Insurance Company, which following regulatory approval will be renamed Praetorian Specialty Insurance Co. Alea, a non-admitted carrier, is authorized to write business in 38 states including New York, California and Texas. The acquisition expands Praetorian’s geographic reach. The Praetorian Financial Group’s insurance subsidiaries are Praetorian Insurance Co. and Redland Insurance Co. Headquartered in New York, Praetorian Financial Group is a subsidiary of Hannover Re and has branch offices in Illinois, Kansas, Tennessee and Nebraska.
Brown & Brown, Hull & Co., DVUA, Apex
Continuing in acquisitions mode, insurance agency Brown & Brown Inc., through its subsidiaries Hull & Co. Inc., and Program Management Services Inc., acquired the assets of a key wholesaler located in the Northeast and a Virginia-based broker specializing in insurance services for public entities.
Hull & Co. Inc. acquired commercial lines wholesaler Delaware Valley Underwriting Agency Inc., and its personal lines spin-off, Residential Underwriting Agency Inc. DVUA and RUA have offices in Pennsylvania, Massachusetts, New Jersey and West Virginia and also write business in North and South Carolina. DVUA writes in 16 states; RUA in 12. Hull will own and operate the acquired assets. The aggregate annualized revenues of the acquired entities are $15 million. DVUA and RUA will continue to operate under those brands as “a division of Hull & Company Inc.”
In the other transaction, Public Risk Underwriters (PRU) acquired Apex Insurance Agency Inc., of Glen Allen, Va., along with Apex Insurance Services of Illinois Inc. and Summit Risk Services Inc. The aggregate annualized revenues of the acquired entities are $5.7 million. Apex Insurance Agency and Apex Insurance Services of Illinois Inc. provide wholesale brokerage, managing general agency and program administration services to public and quasi-public entities. Summit Risk Services provides claims adjusting services for the Apex business.
DVUA, RUA and Apex were subsidiaries of Penn Independent Corp., based in Hatboro, Pa., which is a member company of United America Indemnity Ltd. DVUA and RUA will continue to operate under their own brand names as divisions of Hull. Apex and Summit will now operate as part of PRU, which specializes in public and quasi-public entities nationwide. President Karl Snearer and the management and staff of Apex and Summit will continue to operate in their current geographic areas.
Britain’s Royal & Sun Alliance
Britain’s Royal & Sun Alliance Insurance Group PLC said it would sell its U.S. operations to management for $298.9 million and cancel the company’s listing on the New York Stock Exchange. Royal & Sun said in 2003 that it did not consider the U.S. business central to its main operations and closed it to new business. The sale of the unit, which is operating under the name of Arrowpoint Capital Corp., will result in a loss of about $838.1 million.
The U.S. operations are based in Delaware, where the company employs about 700 people. The business provides insurance coverage for workers’ compensation claims, asbestos claims, and financial transactions. Royal & Sun said it would slash almost 7 percent of its global work force, some 1,550 jobs, by the middle of 2008 as part of a cost-cutting plan.
Benfield, Parisco
The Benfield Group acquired the entire issued share capital of Parisco AS and its subsidiary Parisco Marine AS, the Norwegian marine and energy insurance broker. Parisco AS will become part of Benfield’s corporate insurance broking division, Benfield Corporate Risk. Parisco AS had net assets of approximately $374,000 at Dec. 31 2005, according to Benfield.
IAG, Hastings and Advantage
Insurance Australia Group Limited (IAG) acquired the U.K.-based broker Hastings Insurance Services Limited, the UK’s fifth largest motor insurance broker trading under the names of Hastings Direct and Peoples Choice. Australia’s largest insurer also acquired Advantage Insurance Company Limited, a direct personal lines insurer, specializing in motor insurance in the UK market.
IAG said Hastings Insurance Services is on track to achieve around $372.3 million in gross written premium through its broker business this calendar year. Advantage is expected to underwrite $186 million in gross written premium.
It indicated the purchase price is 1.2 times net assets for Advantage and 10.5 times anticipated calendar year 2006 earnings for Hastings. The total cost is $260.6 million. IAG said the acquisition will be funded from surplus capital and term debt and is subject to regulatory approval.
Gateway, Insurance Center
Gateway Bank & Trust Co. said its subsidiary, Gateway Insurance Services Inc., acquired Insurance Center Inc., an insurance agency based in Chesapeake, Va. The acquisition of the 48-year-old Insurance Center Inc., formerly Failla Insurance Agency Inc., represents Gateway’s first entry into the Virginia insurance market. Gateway Insurance Services currently has eight offices serving northeastern North Carolina. Insurance Center will become the ninth Gateway Insurance Services office and the hub for Gateway’s personal lines insurance in Virginia. The insurance office will be located at the Gateway’s Chesapeake Financial Center at 111 Gainsborough Square, the same location as the Gateway Bank & Trust office.
Gallo Agency, Cove Agency Accounts
Gallo Insurance Agency, an Empire Insurance Holdings LLC company in West Palm Beach, Fla., acquired the individual policy business of Cove Insurance Agency in Palm Beach Gardens, Fla. This acquisition strengthens Gallo’s presence in south Florida and its access to the real estate and mortgage industries.
Gallo said it was attracted to Cove because of its work with real estate agents, developers and mortgage professionals. Cove’s personal line of insurance products also includes auto, boat and umbrella policies.
Empire Equity Group Inc., based in Montvale, N.J., operates under both the Empire Equity Group, Inc. and 1st Metropolitan Mortgage brands.
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