WRM America Holdings, LLC, a specialty lines property & casualty insurance and risk management holding company, has reached a definitive agreement to acquire the flood insurance business of Fidelity National Financial Inc. That unit—Fidelity National Indemnity Insurance Co. (FNII)—will operate as a wholly owned subsidiary of WRM America.
WRM says FNII's central operations will remain in St. Petersburg and the group will retain its 220 employees. The business will continue to be led by Patty Templeton-Jones and G. Michael Sloane, who will become members of the senior management team at WRM America.
FNII is reportedly the nation’s largest provider of federal flood insurance through the National Flood Insurance Program (NFIP). It had over 17 percent of the total write-your-own program market in 2010.
Under the terms of the agreement, WRM America will acquire FNII and Fidelity National Insurance Services for $210 million—consisting of approximately $122.5 million in cash, $75 million in a seller note, and approximately $12.5 million in an expected cash dividend. The transaction is expected to close in the fourth quarter of 2011, subject to regulatory approval and customary closing conditions.
NFIP, which was launched in the 1950s, is currently a significant topic of discussion in Washington. The program is operating under a short-term reauthorization deadline that expires on September 30. On July 13, the U.S. House passed legislation reauthorizing the program until Sept. 30, 2016. Insurance industry groups are urging similar action from the Senate.
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