Global Indemnity Group (GBLI) has agreed to offload its subsidiary American Reliable Insurance Company (ARIC) to Everett Cash Mutual (ECM), a property/casualty mutual insurer serving the farm and agri-business sector.
Furthermore, ARIC divested its farm, ranch and equine book of renewal business to ECM.
In total, GBLI will receive around $85m, which includes release of capital presently supporting operations of ARIC.
GBLI will secure $30m for selling renewal rights as well as an amount equal to surplus when ARIC is divested.
ECM will offer 100% quota share reinsurance in respect of policies to GBLI until it takes over ARIC.
GBLI and ECM expect the acquisition and renewal rights to enhance provision of products and services of ARIC to its policyholders and agency partners.
Set up in 1913, ECM caters to the insurance needs of the agricultural community.
ECM president and CEO Randy Shaw said: “ECM’s acquisition of ARIC will shift ECM from a regional carrier to a national provider with combined gross written premium approaching $200 million. We look forward to engaging with American Reliable employees and agents in the coming days.”
The sale of ARIC to ECM is pending regulatory nod and scheduled to complete in or before the first quarter of 2023.
GBLI CEO David Charlton said: “GBLI will be working closely with ECM to assure that the renewal rights and acquisition transactions will be seamless for ARIC policyholders and ARIC’s agent partners. In that regard, we encourage ARIC’s agents to partner with ECM, who is a carrier dedicated to processing Farm, Ranch, & Equine insurance.”
“These transactions will also enable GBLI to further sharpen its focus on the company’s core small and middle market commercial specialty casualty businesses.”