White Mountains Re Group, Ltd., announced from its Bermuda headquarters that its wholly-owned subsidiary, Folksamerica Reinsurance Company, has completed its acquisition of Mutual Service Casualty Insurance Company, a Minnesota-domiciled, runoff insurer formerly affiliated with Illinois-based Country Insurance & Financial Services.
“As part of a sponsored demutualization and conversion to a stock company, Mutual Service Casualty has been renamed Stockbridge Insurance Company,” said the announcement. “Folksamerica paid approximately $33.6 million for Stockbridge and will record an after tax GAAP gain on the transaction of approximately $21 million. As part of the transaction, Country Mutual Insurance Company, a member of Country’s affiliated group of companies, will provide Stockbridge with approximately $25 million of reinsurance protection in excess of Stockbridge’s carried reserves as of September 30, 2006. Folksamerica is not acquiring any infrastructure or employees in the transaction.”
“We are very pleased with the terms of this runoff acquisition put together by our Simsbury, CT-based Folksamerica Re Solutions unit and with our ability to assist Country in its desire to focus on its ongoing core operations,” stated Tom Hutton, President and CEO of White Mountains Re. “We are taking on a well reserved portfolio with substantial downside protection and we expect this transaction to add solid value for White Mountains’ shareholders both initially and over time.”
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