NU Online News Service, July 1, 1:52 p.m. EDT
Bermuda--based OneBeacon Insurance Group said it has completed the sale of its traditional personal lines business to Tower Group, Inc.
The transaction, which was announced on Feb. 2, included two insurance companies containing the personal lines business, and in relation to the reciprocal insurance exchanges that write business in New York and New Jersey, the two managing attorneys-in-fact, and the two surplus notes issued to OneBeacon.
Net written premiums for the affected books totaled approximately $420 million for the year ended Dec. 31, 2009, the company said. As consideration, based on an estimated June 30, 2010 closing balance sheet, OneBeacon said it received approximately $167 million, representing the estimated statutory surplus of the reciprocal insurance exchanges (as consideration for surplus notes issued by the exchanges), the GAAP equity in the insurance companies and attorneys-in-fact, plus $32.5 million.
OneBeacon said it will include the transaction in its third quarter financial statements, reflecting the sale's July 1 completion date. The company said final purchase price, proceeds from the sale and the net gain are subject to adjustment, based on a final June 30, 2010 closing balance sheet.
"The sale of personal lines is a major milestone in our transformation to a specialty-focused company," OneBeacon Chief Executive Officer Mike Miller said in a statement. "Our ongoing specialty businesses, clear focus and strong capital position create exciting prospects for OneBeacon. We look forward to building upon our strong foundation to deliver enhanced shareholder value."
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