White Mountains Insurance Group has agreed to acquire a majority stake in NSM Insurance Group (NSM) for about $388m.

Hamilton, Bermuda-based White Mountains plans to fund the deal via a combination of cash on hand and new debt issued by NSM.

This transaction, which requires regulatory approvals, is expected to be closed by the end of this year’s second quarter.

White Mountains provides services in property and casualty insurance and reinsurance sectors.

White Mountains CEO Manning Rountree said: "We are pleased to make this investment in NSM alongside the management team. The company is high quality, and we believe there is tremendous opportunity to grow and expand the business.

"We look forward to working with Geof and his team and to providing them with support and resources to continue to grow the business organically and through acquisitions."

NSM is a Pennsylvania-based specialty insurance program administrator with more than $500m worth annual premiums through its relationships with more than 6000 brokerage firms and about 100 insurance carriers.

The company offers a range of speciality insurance sectors including collector cars, non-profit organizations, sports & wellness centers, specialty real estate and pet insurance.  It claims to have deep industry knowledge and capabilities and longstanding relationships with insurance brokers and insurance carriers allowing it to serve as a critical intermediary in speciality insurance market.

NSM CEO Geof McKernan said: "This transaction marks a new and exciting chapter of growth for NSM.  We are thrilled to have the support of an experienced insurance investor with a long-term capital base as we set our course toward future success.

"We look forward to working with the White Mountains team to continue to execute on our growth strategy while delivering the best solutions and services to our insurance carrier partners."

Image: White Mountains insurance to acquire NSM for $388m. Photo: Courtesy of adamr/FreeDigitalPhotos.net.