The terms of the deal state that AFG will pay ABMI about $28m in cash at closing of the transaction.
Ohio-based ABAIS offers D&O and other complementary insurance solutions for banks, small businesses and non-profit institutions.
The business, according to AFG, is expected to contribute almost $50m in net written premiums on an annual basis.
Additionally, the acquirer believes that the deal will further boost its market-leading position in targeted specialty casualty classes of business in the country.
Upon completion of the transaction, ABAIS will remain operating under the ABAIS brand and will become Great American Insurance Group’s 34th specialty property and casualty (P&C) business unit.
American Financial Group Co-CEO Carl Lindner III said: “With the acquisition of ABAIS, we will expand our ability to offer specialty P&C insurance offerings through the long-standing leadership of ABAIS in the banking industry and their focus on commercial coverages for small businesses and nonprofits.
“ABAIS has a long track record of underwriting success and profitability. We are pleased with this addition to our portfolio of diversified, specialty P&C businesses.”
The transaction, likely to conclude in the fourth quarter, is subject to customary regulatory approvals.