Selective Insurance Group, a New Jersey-based holding company for seven property and casualty insurance companies, has agreed to acquire Montpelier US Insurance Company (MUSIC), from Montpelier Re US Holdings.
In 2010, MUSIC generated $48m in gross written premiums from its commercial lines contract binding authority E&S business.
The reinsurer said, the acquisition provides the nationally licensed platform that will allow Selective to quickly begin writing contract binding authority business from its recent renewal rights transaction.
Selective will maintain the current operations in Scottsdale, Arizona, where the MUSIC office is located.
Richard Nenaber, president and CEO of MUSIC, will continue to lead the organization. Selective’s operations in Horsham, Pennsylvania will be unaffected by this transaction.
Montpelier Reinsurance, a wholly-owned subsidiary of Montpelier Re, will retain all unearned premium reserves and all loss and loss expense reserve risk for any business written through closing.
Selective Insurance Group chairman, president and CEO Gregory Murphy said this acquisition includes an end-to-end information technology solution and financial reporting infrastructure that helps build the foundation we need to grow our contract binding authority business.
"These advanced systems will allow us to integrate our entire E&S business more quickly and efficiently," Murphy said.
The deal is expected to close before the end of the year, subject to customary closing conditions and regulatory approvals.