The Bermuda-based Everest Re Group has acquired the business and operations of Heartland Crop Insurance, Inc., a managing general agent, for $55 million plus the agreed upon value of the net assets of the agency, with an additional contingency of up to $13.5 million based on future performance.
Discussions concerning the deal were announced in mid-December.
Heartland, headquartered in Topeka, Kansas, is a specialty underwriter of crop insurance, “offering comprehensive multi peril crop and crop-hail insurance products through its broad distribution network,” said the announcement.”
“With estimated premium of $300 million, Heartland ranks among the larger underwriters of U.S. crop insurance business. Everest will seek to obtain the approval of the USDA Risk Management Agency (RMA) to operate as an approved insurance provider of this business under the Federal Crop Insurance Program for the 2012 crop season, which begins on July 1, 2011.”
Everest Re added that until then it would “continue to participate in this business as a reinsurer. On both a direct and reinsurance basis, Everest expects to generate approximately $160 million of premium from this book for 2011.”
Chairman and CEO Joseph V. Taranto commented: “Heartland provides us the opportunity to grow and diversify our insurance platform into a market that has very attractive underwriting dynamics.
“The acquisition represents a key strategic step towards building out our insurance business into shorter tail specialty lines and is expected to be accretive to earnings in the first year. With its highly experienced team, long-term relationships, and strong track record for performance, Heartland will be a valued addition to the Everest organization.”
Source: Everest Re
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