Capitol Indemnity Corp., a wholly-owned subsidiary of CapSpecialty Inc., said it has acquired the renewal rights to Rockhill Insurance Group’s excess and surplus environmental insurance book of business.

Rockhill is a member of the State Auto Insurance Group, which has been looking to exit the E&S. CapSpecialty is a subsidiary of Alleghany Corp.

CapSpecialty, through its specialty carrier, Capitol Specialty Insurance Corp., will begin quoting all new business submissions made to Rockhill as well as renewals sometime in the first quarter of 2018, according to the announcement.

Financial terms of the transaction were not disclosed.

In 2016, State Auto stopped writing program business and realigned its E&S unit, Rockhill. Last year, State Auto CEO Mike LaRocco said the company decided to exit the E&S business completely. The move is part of State Auto’s continuing turnaround effort following disappointing results in 2015. State Auto acquired Rockhill in 2009 to enter the E&S business.

LaRocco has been stressing a digital transformation at State Auto. In an interview with Carrier Management, he said the E&S business was not a good strategic fit with State Auto’s core products of home, auto, personal umbrella, and on the commercial side, commercial auto, BOP, commercial umbrella, middle-market commercial, workers compensation and farm and ranch business.

“We really had to evaluate, if we stayed in specialty, what type of investment would we need to make in those businesses? They are very very different businesses—primarily, wholesale distribution. It’s a different technology [and] a different commitment financially,” LaRocco told Carrier Management.

Stephen Sills, CEO of CapSpecialty, said that adding Rockhill’s environmental book to CapSpecialty’s existing environmental book will further strengthen his company’s presence in this segment for small to mid-sized businesses.

Sills said CapSpecialty will be keeping Rockhill employees currently working on this book.

“CapSpecialty is committed to offering our wholesale brokers and insured customers access to strong environmental coverage, and Rockhill’s appetite, products and focus on small to mid-sized business are all well aligned with those of CapSpecialty,” said Tony Anzalone, head of Specialty Casualty at CapSpecialty.

Keefe, Bruyette & Woods served as financial advisor to State Auto in the transaction.

In addition to Capitol Indemnity Corp. and Capitol Specialty Insurance Corp., CapSpecialty’s affiliates include Platte River Insurance Co.

In addition to CapSpecialty, holding company Alleghany’s property/casualty subsidiaries include Transatlantic Holdings and RSUI Group. Last year Alleghany sold Pacific Compensation Insurance Co., an underwriter of workers’ compensation insurance primarily in California, to CopperPoint Mutual Insurance Co. for $150 million.

(This article was previously published on Insurance Journal’s website. Author Andrew Simpson is Chief Content Officer for Wells Media, which publishes both Carrier Management and Insurance Journal.)