NU Online News Service, Nov. 18, 4:00 p.m. EST
QBE Insurance Group today announced its acquisition of the U.S. insurance operations of Bermuda-based RenaissanceRe, including Iowa-based crop insurer Agro National, for approximately $275 million.
The acquisition, subject to regulatory approvals, is expected to be completed by March 2011.
It is the second acquisition of a U.S. crop insurance company this year by QBE.
QBE Insurance Group Limited, based in Sydney, Australia, is one of the top 25 insurers and reinsurers worldwide with operations in all key global insurance markets
QBE completed the acquisition of NAU Country, Ramsey, Minn., in June.
NAU and Agro are signees to the standard reinsurance agreement negotiated by the National Crop Insurance Services (NCIS) and the U.S. Department of Agriculture in September.
NCIS represents the industry in negotiations with the Department of Agriculture, which subsidizes the U.S. crop insurance program.
According to an official at Kekst & Co., the other pieces of RenaissanceRe QBE is acquiring are scattered property and casualty admitted businesses.
The Kekst & Co. spokesman said the divestitures will allow RenaissanceRe to concentrate on its more profitable reinsurance operations.
QBE officials said the acquisition will be funded from existing resources.
QBE said the RenaissanceRe operations it is acquiring are expected to generate more than $350 million of gross written premium in 2011 and have net profit after tax of more than $30 million.
Moody's affirmed RenaissanceRe's A1 insurance financial strength rating. Kevin Lee, senior credit officer at Moody's said, "The sale of these insurance operations will allow RenRe to exit a subscale business that was less of a cultural fit, and with negligible impact to its balance sheet.
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