Australian international general insurance and reinsurance company QBE Insurance Group has announced that it is to purchase the US-based Praetorian Financial Group from Hannover Re for $800 million.
The acquisition is expected to bring an additional $1.4 billion profit to gross premium income on an annualized basis. The funding of the acquisition will be from internal excess capital, dividend reinvestment and short-term debt.
Based in New York, Praetorian Financial Group (PFG) writes 37 specialist property and casualty insurance programs through various managing agents and specialist retail agency business via brokers. It was created by Germany’s Hannover Re in 2005, to selectively renew business from Clarendon Insurance Group, a subsidiary of Hannover Re.
The acquisition will form part of the QBE Americas division under Tim Kenny, president and CEO.
Mr Kenny said, The acquisition is consistent with our strategy of building our business in the specialist insurance program and small to medium regional markets of the US. It follows the successful acquisitions of National Farmers Union Property and Casualty Company in 2005 and the One Beacon Agriculture division earlier this year.
The transaction is subject to regulatory approval and is scheduled to be completed in the second quarter of 2007.