Ohio-based American Financial Group Inc. and Farmers Alliance Mutual Insurance Company announced that they have executed a letter of intent to acquire the multi-peril crop insurance and the crop hail insurance businesses written through Farmers Crop Insurance Alliance Inc (FCIA). Assuming its completion, this acquisition would be made by AFG’s subsidiary, Great American Insurance Company.
Both Great American and Farmers Alliance are providers of
agricultural insurance products. Great American has been providing crop-hail coverage since 1925 and began writing multi-peril crop insurance in 1980 after Congress authorized the program.
Great American generated gross written premiums of approximately $447 million in 2004. Great American’s crop business is similar in size to Farmers Crop whose gross written premiums in 2004 were approximately $504 million.
While the transaction is subject to the companies’ negotiation of a
binding agreement, and will be subject to customary conditions and regulatory approvals, a closing is anticipated in the third quarter of 2005.
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