Brown & Brown announced the sale of certain assets of one of its subsidiaries, Axiom Re, a reinsurance brokerage operation based in North Carolina with approximate annual revenues of just under $7m to Beach Re effective December 31, 2014.
The parties have agreed that Brown & Brown will assist Beach with transition of teammates, payroll, benefits administration and other post-closing operational matters. Brown & Brown expects the transaction to result in a one-time, after-tax earnings per share loss of approximately $0.22 in 2014.
In connection with this transaction, Brown & Brown’s, Evergreen Re and Beecher Carlson’s managed care operations will be merging to create expanded managed care capabilities, which will operate under the name of Beecher Evergreen Managed Care.
The sale of Axiom Re is part of a business strategy by Brown & Brown to exit the reinsurance brokerage space. Brown & Brown first acquired Axiom Re in 2006 with a focus on middle-market reinsurance placements.
Brown & Brown will continue to utilize Axiom Re for modeling services and has entered into a relationship with Beach for the delivery of reinsurance solutions for current and prospective Brown & Brown customers. The former Axiom Re team will continue to operate in North Carolina under Mike Cross’s leadership, and will be part of Beach’s North American operations.
Brown & Brown, through its subsidiaries, offers a broad range of insurance products and related services. Additionally, certain Brown & Brown subsidiaries offer a variety of risk management, third-party administration, and other services.