OneBeacon Insurance Group said it is selling its high risk personal auto insurance business, AutoOne, to Interboro Holdings Inc. of New York.
AutoOne, formed in 2001, serves the automobile assigned risk insurance markets primarily in New York and New Jersey.
OneBeacon said it expects to record a charge of approximately $28 million pre-tax ($18 million after tax) in its third quarter financial statements reflecting the estimated loss on the sale of AutoOne.
OneBeacon said it will transfer AutoOne Insurance Co. and AutoOne Select Insurance Co., including the assets, liabilities (including loss reserves and unearned premium reserves), and the equity capital of the business to the new owner. It will also transfer staff, systems and office space in Melville, N.Y.
Interboro Insurance, based in Mineola, N.Y., sells auto and home insurance. CEO David Nichols told Insurance Journal the deal gives his company potential for growth in upstate New York and in New Jersey as well as more auto business to help balance its growing homeonwers book of business. He said the company hopes to use the AutoOne network of brokers to help it expand.
The transaction is expected to close in the fourth quarter of 2011.
OneBeacon said the sale does not affect its specialty insurance operations.
“This transaction allows us to continue our focus on our higher performing specialty operations, while aligning AutoOne with an owner committed to serving the personal automobile insurance market,” said OneBeacon CEO Mike Miller.
OneBeacon Insurance Group’s businesses include OneBeacon Professional Insurance, International Marine Underwriters, OneBeacon Accident Group, OneBeacon Entertainment, OneBeacon Energy Group, OneBeacon Government Risks, A.W.G. Dewar (tuition refund), collector cars and boats written through Hagerty Insurance Agency, OneBeacon Technology Insurance, OneBeacon Specialty Property, OneBeacon Property and Inland Marine and OneBeacon Excess and Surplus Lines.
Interboro was formerly Interboro Mutual, which was placed in rehabilitation by state regulators in 2004. It emerged from insolvency in 2007.
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