Posted on 14 Sep 2010
Ace Ltd. announced that it will buy the remaining 80 percent stake in crop insurance provider Rain and Hail Insurance Service Inc. for about $1.1 billion in cash.
The property/casualty insurer already owns 20 percent of Rain and Hail, which will continue to operate as a separate franchise within the company’s Westchester division and Insurance-North America operations.
The transaction is expected to close by the end of the year and is subject to the approval of Rain and Hail shareholders and other conditions.
Based in Johnston, Iowa, Rain and Hail provides multiple peril crop and crop-hail insurance protection in the United States and Canada. It has been in existence since 1919.
Evan G. Greenberg, Ace’s chairman and CEO, said the acquisition will be immediately accretive to company earnings, return on equity and book value per share.
“This is a business we know well, and we project a return on capital in excess of our 15 percent hurdle rate,” Greenberg said.