American Financial Group, Inc. has executed a definitive agreement to purchase Farmers Crop Insurance Alliance, Inc. (Farmers) from Farmers Alliance Mutual Insurance Company (Farmers Alliance). Farmers is a leading provider of multi-peril crop and crop hail insurance whose gross written premiums in 2004 were approximately $504 million. As part of the AFG organization, Farmers will continue to do business in all states in which it currently operates.
Under the agreement, AFG will pay Farmers Alliance $17.5 million in cash at closing and additional amounts of up to 10 percent of annual premiums based on certain retention criteria. While AFG expects to retain a majority of Farmers’ business, there is uncertainty as to the premiums that ultimately will be retained due to the departure of several Farmers’ employees in the last several months.
Through the operations of the Great American Insurance Group, AFG, based in Cincinnati, Ohio, is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of retirement annuities, supplemental insurance and life products.
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