OneBeacon Insurance Group says it has finalized the sale of subsidiary Essentia Insurance Co.—a provider of collector car and boat insurance through Hagerty Insurance Agency—to Markel Corp.
OneBeacon and Hagerty Insurance Agency have terminated their 5-year exclusive underwriting agreement.
When the sale was first announced in October, OneBeacon said it and Hagerty were "unable to reach mutually acceptable terms to extend the relationship."
OneBeacon CEO Mike Miller said, "We believe the economics associated with the termination of the Hagerty agreement and the related sale of Essentia fairly compensate OneBeacon, marking the end to what has been a profitable venture."
Minnetonnka, Minn.-based OneBeacon says it expects to book a $23 million pretax gain on the sale of Essentia in first-quarter financial statements.
The loss reserves and unearned premium reserves prior to the sale of Essentia will stay with OneBeacon to be runoff.
When it announced the Essentia deal, OneBeacon also said it expected more a 2012 third-quarter charge of more than $100 million related to a deal to send its runoff business to an affiliate of Armour Group Holdings. It was the "final step in our transformation into a pure specialty company," said Miller.
OneBeacon booked a $62 million net loss for the 2012 third quarter. It is scheduled to release fourth-quarter results on Feb. 5.
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