Ace on $1.3bn acquisition spree
Ace reported a $1.1bn acquisition of US crop insurer Rain and Hail Insurance Service and a separate $200mn deal to buy Malaysian business Jerneh Insurance Berhad.
The Swiss-incorporated (re)insurer already held a 20 percent stake in Iowa-based Rain and Hail. The deal is subject to shareholder approval and is expected to close in the fourth quarter.
Ace CEO Evan Greenberg said Rain and Hail was financially attractive to shareholders and would produce results that are "immediately accretive" to earnings, return on equity and book value per share.
"This is a business we know well, and we project a return on capital in excess of our 15 percent hurdle rate," said Greenberg.
Ace is one of the largest writers in the US crop insurance market.
Rain and Hail is the second-largest crop insurance underwriter, providing multiple peril crop and crop-hail insurance protection in the US and Canada.
It will continue to operate as a separate and distinct franchise within the Ace Westchester division and Ace Insurance Company of North America operations.
The global insurer also received approval by Malaysia regulators for its $200mn acquisition of Jerneh Insurance Berhad.
Jerneh is a general insurance company that writes marine, engineering and motor as well as personal lines, among others.
The business is 80 percent owned by Jerneh Asia Berhad, with Paramount Corp holding the balance.
Asia Pacific is one of the fastest growing insurance markets in the world, with penetration rates rapidly increasing.
Ace had shareholders' equity of $21.4bn at the end of the second quarter, as well as market capitalisation of $19.4bn.