Markel Corp., the Richmond, Virginia-based insurer, will spend at least $135 million to acquire closely held Aspen Holdings Inc. to add sales of workers’ compensation coverage for small businesses.
Aspen, which does business as FirstComp, will operate as a separate business unit, Markel said today in a statement distributed by PR Newswire. Its shareholders will receive cash payments of $135 million plus stock option value, Markel said.
Markel is betting on a rebound in workers’ compensation insurance as it targets smaller markets. Rates for commercial property and casualty coverage declined 5.3 percent in the first quarter after a 5.6 decline in the prior period, the Council of Insurance Agents & Brokers said in an April report.
“Aspen’s workers’ compensation expertise can be brought to bear to service current Markel customers,” said Mike Crowley, Markel’s president and co-chief operating officer, in the statement.
Fairfax Financial Holdings Ltd., the Canadian insurer run by Prem Watsa, purchased Zenith National Insurance Corp. earlier this year for about $1.3 billion in cash, adding workers’ compensation sales in California.