NU Online News Service, July 15, 2:43 p.m. EDT
Markel Corporation announced it will acquire Aspen Holdings, Inc., a privately-held insurance group that provides workers' compensation insurance and related services, for approximately $135 million in cash plus the value relating to certain outstanding Aspen stock options.
Aspen, headquartered in Omaha, Neb., operates in 31 states primarily through FirstComp Insurance Company, FirstComp Underwriters Group Inc. and FirstComp Insurance Agency Inc.
Bruce Kay, Markel vice president, Investor Relations, said Markel is a specialty niche property and casualty company, and is always looking for opportunities to expand into niche markets.
He said while workers' compensation would not seem like a niche business, Aspen has carved out a niche within workers' compensation insuring primarily small businesses with relatively few employees.
The insureds, Mr. Kay said, fit the Markel model of niche business. He also said Markel insures many small accounts in different classes of businesses, but has not been writing workers' compensation for these risks.
"Now," he said, "we have a facility to meet their workers' compensation requirements."
He also noted that Aspen brings to the table a network of 9,000 retail agents.
Markel said that Aspen's subsidiaries collectively underwrite more than $300 million of gross written premium annually.
Mr. Kay said Aspen does not retain all $300 million, and he said another opportunity with the acquisition is to retain more of the business Aspen currently writes.
Markel said that following the acquisition, Aspen will continue to operate as a separate business unit, with Luke Yeransian, Aspen's current chief executive officer, as president. The operating unit will be part of Markel's specialty admitted segment, headed by Mike Crowley, Markel's president and co-chief operating officer.
The transaction, subject to closing conditions including regulatory approval, is expected to close before year-end, said Markel.
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