Montpelier To Sell U.S. Insurance Business
Montpelier Re Holdings Ltd., a leading provider of short-tail reinsurance and other specialty lines, today announced that it has entered into a definitive agreement with Selective Insurance Group, Inc. for the sale of Montpelier U.S. Insurance Company [MUSIC], the Company’s U.S. excess and surplus lines insurance business.
Consideration for the transaction will reflect MUSIC’s net asset value at closing and will be payable in cash. Based on MUSIC’s net asset value at June 30, 2011, the transaction is valued at approximately $55 million and is expected to result in an increase to Montpelier’s current tangible book value per common share of approximately $0.24.
Christopher L. Harris, President and CEO of Montpelier, said: “We are pleased to reach an agreement with Selective on the sale of MUSIC. In the current environment, we believe now is an appropriate time to sharpen our underwriting focus on our core short-tail reinsurance lines.
“This transaction will make us more nimble and will allow us to redeploy additional capital into our Bermuda and London platforms, where we are seeing increasingly encouraging market conditions.”
The transaction, which is subject to regulatory approvals and certain customary closing conditions, is expected to close in the fourth quarter of 2011.
