National General Holdings Corp. has agreed to acquire National Farmers Union Property and Casualty Co. from QBE North America. The estimated purchase price is $43 million.
National Farmers Union Insurance writes personal and farm auto and farm and homeowners’ insurance in the midwestern states through roughly 400 agencies. It also insures a telecommunications insurance program.
Based in North Dakota, National Farmers Union Insurance has been serving rural America since 1945 and has approximately 60 employees. The company wrote $175 million in gross written premium in 2017, with the majority of premium written in personal/farm auto (58% of 2017 GWP) and farm/homeowners (33% of 2017 GWP) lines. The company is licensed in 49 states with a heavy concentration of business in the Midwest: North Dakota, Colorado, Montana, Minnesota, Kansas, Wyoming, Nebraska and Utah.
The transaction is expected to close in the first half of 2019.
QBE North America is reorganizing to focus on its specialty, core commercial, program, crop and its reinsurance businesses. Its sale of National Farmers Union comes just three months after it sold its personal insurance independent agency policies in 47 states to Safeco Insurance, a division of Liberty Mutual. The book of business, which is sold through more than 900 independent agents and brokers nationwide, consists of two primary lines of business: personal auto and personal property insurance. The sale represented $230 million in gross written premium.
“We thoughtfully chose to move this area of the business to National General for its ability to consistently deliver an experience of excellence to our agents and customers,” said Russ Johnston, CEO of QBE North America. “By intensifying our focus, we hope to improve our future earnings profile and enhance our ability to deliver our core capabilities to our limited and preferred distribution network.”
National General Holdings Corp., headquartered in New York City, is a specialty personal lines insurance holding company. National provides personal and commercial automobile, homeowners, umbrella, recreational vehicle, motorcycle, supplemental health, and other niche insurance products.
“This acquisition fits well with our existing business mix, expanding our personal lines footprint in the Midwest and opening up a new distribution network through an exclusive arrangement with the National Farmers Union,” said National General CEO Barry Karfunkel.
Last June, AmTrust Financial Services Inc., which had seen its stock drop after earlier reporting a reserve shortfall and weaknesses in its accounting, sold its shares in National General Holdings Corp. for approximately $211.7 million.
In 2016, National General bought the renewal rights of Nationwide Mutual’s personal and commercial non-standard vehicle in-force policies. That deal involved 337,000 private passenger auto and about 26,000 non-standard commercial auto Nationwide policies.
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