Business Moves

OneBeacon, QBE

OneBeacon Insurance Group completed its renewal rights and asset sale agreement to transfer its agricultural division to QBE the Americas, a 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 United States concentrating 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 it expects agricultural-based business will be more than $300 million in premium. The Americas division does business through eight companies. OneBeacon Insurance Group is wholly owned by White Mountains Insurance Group Ltd.

Praetorian, Alea

Praetorian Financial Group Inc. acquired Alea North America Specialty Insurance Co., which will be renamed Praetorian Specialty Insurance Co., following regulatory approval. Alea, a nonadmitted carrier, is authorized to write business in 38 states. The acquisition expands Praetorian’s geographic reach. The Praetorian Financial Group’s insurance subsidiaries are Praetorian Insurance Co. and Redland Insurance Co. Based 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

Brown & Brown Inc., through its subsidiaries Hull & Co. Inc. and Program Management Services Inc., acquired commercial lines wholesaler Delaware Valley Underwriting Agency Inc., as well as 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 writes 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 & Co.

Hull & Co. also acquired Public Risk Underwriters 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. Apex and Summit will operate as part of PRU.

AIG, Arch Ocean Marine Business

AIG Global Marine, a division of the property and casualty insurance subsidiaries of American International Group, purchased the U.S. Ocean Marine business from Arch Insurance Co. Under the terms of the agreement, the U.S. ocean marine insurance business underwritten by Arch will be serviced by AIG Global Marine.

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, will result in a loss of about $838.1 million.

Royal & Sun’s 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 work force, some 1,550 jobs, by the middle of 2008 as part of a cost-cutting plan.

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Benfield, Parisco AS and Parisco Marine

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 by Dec. 31 2005, according to Benfield.

IAG, Hastings and Advantage

Insurance Australia Group Ltd. acquired Hastings Insurance Services Ltd., the United Kingdom’s fifth largest motor insurance broker trading under the names of Hastings Direct and Peoples Choice. Australia’s largest insurer also acquired Advantage Insurance Co. Ltd., a direct personal lines insurer, specializing in motor insurance in the U.K. market.

IAG said Hastings Insurance Services should achieve around $372.3 million in gross written premium through its broker business in 2006, according to the company. Advantage is expected to underwrite $186 million in gross written premium.

IAG 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.

Guaranty Insurance, South Valley

Guaranty Insurance Services Inc. acquired South Valley Insurance of Bakersfield, Calif. South Valley Insurance will operate as a division of Walter Mortensen Insurance, Guaranty Insurance’s affiliate operation in California’s Central Valley area. SVI has six employees and annual revenues of $1.5 million.

The acquisition is another step in Guaranty Insurance Services’ growth trend in Texas and California, the company said. In February 2002, the agency bought James Econn and Co. Insurance of Los Angeles. In February 2004, Guaranty acquired TCT Insurance Group, one of the largest agencies in the in the Dallas-Ft. Worth Metroplex. In January 2005, Guaranty Insurance had its largest acquisition to date, absorbing Walter Mortensen Insurance with nine branches in the Bakersfield, Calif., area.

Guaranty Insurance Services Inc. is member of the Guaranty Financial Services family of companies, which includes Guaranty Bank. Guaranty Bank has assets of more than $17 billion and operates a network of banking centers throughout Texas and California. Guaranty Financial Services is a wholly owned subsidiary of Temple-Inland Inc.

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