Global Indemnity plc will snatch up a specialty property/casualty company owned by Assurant in a deal worth about $394 million and possibly more.
The insurer and reinsurer plans to seal the deal for American Reliable Insurance Company through its U.S. affiliate, pending regulatory clearance and other requirements. Details of the acquisition are complex. Plans call for Global Indemnity’s U.S. arm to pay Assurant between $114 million and $120 million in cash once the deal closes, depending on American net earnings between June 30, 2014 and the deal closing. But Global Indemnity would also assume $280 million in insurance-related liabilities, obligations and mandates, according to the sale announcement.
In purchasing American Reliable, Global Indemnity would gain more U.S. focused on specialty personal lines, plus agricultural property and casualty insurance. American Reliable’s products are distributed through both general and independent agents, the sale announcement noted, and the company has operations in Scottsdale, Ariz. and Omaha, Neb..
Cindy Valko, Global Indemnity’s CEO, noted in a statement that American Reliable gives her company a better position in the U.S (through its divisions) as a specialty personal, agricultural and commercial property/casualty insurance operation. She said the combined Global/American Reliable operations will give customers more complementary products, infrastructure and underwriting expertise.
Valko added her company will closely coordinate the change in ownership with Assurant.
Earlier this fall, Assurant, a New York-based insurer, named Alan Colberg to be its next CEO in the wake of a big sale drop in insurance coverage for foreclosed homes. Colberg, in Bloomberg’s coverage of the change, said Assurant would instead seek expansion in voluntary employee benefits coverage such as dental insurance, life insurance, vision coverage and accident/critical-illness protection.
Source: Global Indemnity plc