Everest Re Purchases Heartland For $55 Million
Bermuda-domiciled Everest Re Group, Ltd. announced yesterday [Jan. 3] that it has acquired the business and operations of Heartland Crop Insurance, Inc., a managing general agent, for $55 million plus the agreed upon value of the net assets of the agency, with an additional contingency of up to $13.5 million based on future performance.
Everest Re Group, Ltd. is a Bermuda holding company headquartered in Wessex House, Reid Street that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the US and international markets. Everest Reinsurance (Bermuda), Ltd., including through its branch in the United Kingdom, provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers. Everest Reinsurance Company (Ireland), Limited provides reinsurance to non-life insurers in Europe. Everest National Insurance Company and Everest Security Insurance Company provide property and casualty insurance to policyholders in the U.S. Everest Indemnity Insurance Company offers excess and surplus lines insurance in the US.
Heartland, headquartered in Topeka, Kansas, is a specialty underwriter of crop insurance, offering comprehensive multi peril crop and crop-hail insurance products through its broad distribution network. With estimated premium of $300 million, Heartland ranks among the larger underwriters of US crop insurance business.
Everest will seek to obtain the approval of the US Department of Agriculture Risk Management Agency (RMA) to operate as an approved insurance provider of this business under the Federal Crop Insurance Program for the 2012 crop season, which begins on July 1, 2011. Until then, Everest will continue to participate in this business as a reinsurer. On both a direct and reinsurance basis, Everest expects to generate approximately $160 million of premium from this book for 2011.
Commenting on this transaction, Joseph V. Taranto, the company’s chairman and Chief Executive Officer, said, “Heartland provides us the opportunity to grow and diversify our insurance platform into a market that has very attractive underwriting dynamics. The acquisition represents a key strategic step towards building out our insurance business into shorter tail specialty lines and is expected to be accretive to earnings in the first year. With its highly experienced team, long-term relationships, and strong track record for performance, Heartland will be a valued addition to the Everest organisation.”
