Central National Insurance Company to be acquired for $5m
White Mountains Re is acquiring Central National Insurance Company of Omaha from Drum Financial Corporation.
In runoff since 1989, Central National has been operated under an order of Rehabilitation in the State of Nebraska since 1990.
The deal is subject to the termination of the rehabilitation proceedings by the court and the approval of the Nebraska Department of Insurance. Under the terms of the agreement, White Mountains Re will pay approximately $5 million. Central National's statutory surplus as of September 30, 2009 was $13.3 million.
"We are very pleased by the terms of this transaction put together by the White Mountains Re Solutions team", said Allan Waters, President and Chief Executive Officer of White Mountains Re. "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 run-off 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."
Central National represents the 6th run-off acquisition by the White Mountains Re Solutions team.
The transaction is expected to close during the first quarter of 2010 subject to regulatory approvals and other closing conditions.