Posted on 03 Feb 2010
Insurer Tower Group Inc. said Tuesday it will buy the personal lines division of OneBeacon Insurance Group for about $180 million.
The transaction involves the acquisition of two insurance companies, two management companies, certain renewal rights and other assets.
The acquired insurance companies -- Massachusetts Homeland Insurance Co. and York Insurance Co. of Maine -- write about $250 million of annual premiums.
The acquired management companies are the attorneys-in-fact for Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer, and its New Jersey based stock insurance subsidiary, New Jersey Skylands Insurance Co. Together, they manage about $250 million in annual premium written.
Tower said the acquisition allows it to combine its personal lines of businesses with OneBeacon's to create a separate business segment with annualized premiums written and managed of approximately $700 million.
The business will include private passenger automobile and homeowners policies.
The personal lines division writes business in the Northeastern United States with offices in Canton, Mass.; South Portland, Maine; and Williamsville, N.Y.
Tower said the deal will improve its profitability and financial flexibility.
The sale allows OneBeacon to free up capital, increasing its financial flexibility and reducing catastrophe exposure, CEO Mike Miller said.