HCC Insurance Holdings Inc. said has agreed to acquire Producers Ag Insurance Group Inc. (ProAg) from CUNA Mutual Group in an all-cash purchase of ProAg’s capital stock for $110 million.
The transaction, which is subject to regulatory approvals, is expected to close in the first quarter of 2015.
HCC said ProAg’s current management team will continue to operate the business.
Amarillo, Texas-based ProAg is a leading writers of crop insurance in the United States with gross earned premiums of $633.5 million in 2013. The company writes multi-peril crop, crop hail, named peril and livestock insurance. In 2013, ProAg was the sixth largest writer of multi-peril crop insurance and crop hail insurance, with a five percent market share. The company has seven offices across the United States and employs approximately 500 people supporting operations in 41 states.
HCC joins Starr Companies, XL Group and Validus Holdings in entering the crop insurance business. Deere & Co. recently said it is considering selling its crop insurance unit.
Specialty insurer HCC write aviation, contractors, public entities as well as weather insurance. It also sells professional liability, accident-and-health coverage and surety.
“Crop insurance is a non-correlated line of business we strategically targeted to add to HCC’s diversified portfolio of specialty insurance businesses. We believe ProAg provides a solid platform to incrementally grow our profitability,” said Christopher J.B. Williams, HCC’s Chief Executive Officer.
ProAg has been selling crop coverage since 1926. CUNA Mutual Group’s relationship with the company began in 2006 as the lead reinsurer for ProAg and as a direct writer of crop insurance. In 2007, the company acquired a minority ownership of ProAg, and in 2009, CUNA Mutual became full owner.
CUNA Mutual specializes in insuring credit unions and their members. The company saw ProAg as a way for it to diversify during a time when the economy was fragile and the financial services industry was facing a number of challenges. Today, CUNA Mutual Group says its primary business lines show strong growth.
“This transaction allows our company to put even more focus on our core business lines serving consumers, credit unions, small plan advisors, and other core customer groups,” said Robert N. Trunzo, president and CEO, CUNA Mutual Group. “It also ensures America’s farmers can continue to count on ProAg for crop insurance coverage.”
J.P. Morgan Securities LLC served as exclusive financial advisor to HCC on the transaction. Goldman Sachs & Co. acted as the financial advisor to CUNA Mutual Group.
Was this article valuable?
Here are more articles you may enjoy.
Former Congressman Charged After Collision with State Trooper in Florida 
Progressive Gains as Drivers Shop Around for Auto Insurance—Again 
Undercover St. Louis Officer Beaten by Colleagues Awarded $23.5M 
How California’s Huge Raises for Fast-Food Workers Will Ripple Across Industries 
