American Financial Group, Inc., (AFG) said it has purchased Farmers Crop Insurance Alliance, Inc., from McPherson, Kan.-based Farmers Alliance Mutual Insurance Company.
Farmers provides multi-peril crop and crop hail insurance, and had gross written premiums in 2004 of more than $504 million.
Cincinnati-based AFG said Farmers would continue to do business in the states in currently operates in.
AFG said that under the agreement, the company would pay Farmers $17.5 million in cash at closing and an additional amount up to 10 percent of annual premium based on certain retention criteria. AFG said it expects to retain a majority of the business, but there is uncertainty about the ultimate amount of premium that will be retained "due to the departure of several Farmers' employees in the last several months."
AFG is engaged primarily in property-casualty insurance, focusing on specialized commercial products, the sale of retirement annuities, supplemental insurance and life products, the company said. It has provided crop insurance since 1925, and the division produced gross written premium of approximately $447 million in 2004.
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