RLI has entered into a two-year agreement to become a quota share reinsurer of Producers Agricultural Insurance Company (ProAg), a subsidiary of CUNA Mutual, under which RLI will assume 6% of ProAg’s multi-peril crop and crop hail premium and exposure.
ProAg underwrote $592mn of crop insurance in 2008. Crop insurance is purchased by agricultural producers for protection against crop losses due to natural disasters and other perils. The financial results of the agreement are expected to begin to be recognized in the first quarter of 2010.
Jonathan Michael, president and CEO of RLI, said: “Crop insurance represents a market segment with attractive fundamentals and returns uncorrelated to our current products, and this quota share reinsurance represents an ideal entry point. ProAg has a talented management team that is executing on their strategy to develop and expand their markets. This partnership demonstrates our commitment to identify and enter profitable niche markets.”
RLI is a specialty insurance company, which offers a portfolio of property and casualty coverages and surety bonds.