(Bloomberg) -- HCC Insurance Holdings Inc. agreed to buy Producers Ag Insurance Group from CUNA Mutual Group for $110 million to diversify into the business of guarding farmers against losses.
The all-cash deal is expected to be completed in the first quarter of next year, and the price could change based on fluctuations in ProAg’s net worth, Houston-based HCC said in a statement today. ProAg had gross earned premiums of $633.5 million last year and has about 500 employees, according to the statement.
HCC joins insurers including XL Group Plc, Validus Holdings Ltd. and Maurice “Hank” Greenberg’s Starr Cos. in pushing into crop coverage to diversify risks and take advantage of a government program that absorbs some losses for the industry. HCC backs construction projects, guards clients against environment risks, and sells accident-and-health coverage.
“Crop insurance is a non-correlated line of business,” HCC Chief Executive Officer Christopher J.B. Williams said in the statement. “ProAg provides a solid platform to incrementally grow our profitability.”
CUNA Mutual is the provider of insurance to credit unions and their members. HCC has assets of $10.9 billion, according to the statement. The buyer was advised by JPMorgan Chase & Co.
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