White Mountains Re, a wholly owned subsidiary of White Mountains Insurance Group, said that through a subsidiary it has entered into a definitive agreement to acquire Central National Insurance Company of Omaha from Drum Financial.
In runoff since 1989, Central National has been operated under an order of Rehabilitation in the State of Nebraska since 1990.
The transaction is subject to the termination of the rehabilitation proceedings by the court and the approval of the Nebraska Department of Insurance. As per the agreement, White Mountains Re will pay approximately $5m.
Allan Waters, president and chief executive officer of White Mountains Re, said: We are very pleased by the terms of this transaction put together by the White Mountains Re Solutions team. Although modest in size, this transaction continues our long history of building shareholder value through acquisitions of runoff insurance and reinsurance companies.
Neal Wasserman, president of White Mountains Re Solutions, said: Despite a competitive market the past few years in the runoff sector, this acquisition demonstrates our ability to successfully complete value-adding acquisitions that meet our return thresholds while at the same time allowing sellers to achieve their goal of extracting trapped capital and obtaining a full and final exit from the insurance business.