RenaissanceRe Holdings Ltd said it would buy fellow Bermuda-based reinsurer Platinum Underwriters Holdings Ltd for about $1.9 billion to boost its U.S. business.

Platinum shareholders will get the equivalent of $76 per share in stock and cash, representing a 24 percent premium to Platinum’s closing price of $61.27 on Friday.

Platinum shares were trading at $72.50 before the bell, while Renaissance shares were unchanged at $101.46.

Reinsurers such as RenaissanceRe and Platinum help insurance companies cover the cost of major damage claims, such as for hurricanes or earthquakes, in exchange for part of the premiums their customers pay.

But fewer natural catastrophes in recent quarters and a rise in competition from alternative sources of capital, such as big investors in search of higher returns, have been reducing reinsurers’ pricing power and pushing them to look at buying better products or geographic diversification.

RenaissanceRe Chief Executive Kevin O’Donnell said in a statement he expects the deal to accelerate the growth of its U.S. specialty and casualty reinsurance business.

RenaissanceRe will issue 7.5 million common shares, valued at about $761 million, and $1.16 billion in cash.

Platinum’s shareholders will get a $10-per-share special dividend, and will be able to choose the rest in the form of $66 in cash or 0.6504 in RenaissanceRe shares or a combination of $35.96 in cash and 0.2960 RenaissanceRe stock.

RenaissanceRe said it expected annual cost savings of $30 million from the deal, which is due to close in the first half of 2015.

Morgan Stanley & Co LLC is the financial adviser to RenaissanceRe, while Goldman Sachs & Co is advising Platinum.

Willkie Farr & Gallagher LLP is the legal counsel for RenaissanceRe, while Sullivan & Cromwell LLP is advising Platinum.

(Reporting by Avik Das and Anil D’Silva in Bangalore; Editing by Ted Kerr, Siddharth Cavale and Maju Samuel)