Brown & Brown Inc. sold certain assets of one of its subsidiaries, Axiom Re, to Beach Re Limited effective December 31, 2014.
Axiom Re is a reinsurance brokerage operation based in North Carolina with approximate annual revenues of just under $7 million.
Beach Re is the U.S. arm of independent reinsurance broker Beach & Associates, which operates in London, Bermuda, Toronto, and New York.
Brown & Brown said the sale is part of a business strategy to exit the reinsurance brokerage business.
In connection with this transaction, Brown & Brown’s said its Evergreen Re and Beecher Carlson’s managed care operations will be merging to create expanded managed care capabilities, which will operate under the name of Beecher Evergreen Managed Care.
The former Axiom Re team will continue to operate in North Carolina under Mike Cross’s leadership, and will be part of Beach’s North American operations. The parties have agreed that Brown & Brown will assist Beach with transition of employees, payroll, benefits administration and other post-closing operational matters.
In November, Aquiline Capital Partners, a New York-based private equity firm, announced it had made an investment for a majority of the equity in Beach & Associates.
Brown & Brown first acquired Axiom Re in 2006 with a focus on middle-market reinsurance placements.
Brown & Brown said it expects this transaction to result in a one-time, after-tax earnings per share loss of approximately $0.22 in 2014.
Brown & Brown said it will continue to utilize Axiom Re for modeling services and has entered into a relationship with Beach for the delivery of reinsurance for current and prospective Brown & Brown customers.
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