Global Indemnity Group, LLC (NYSE:GBLI) (“GBLI”), recently announced that American Reliable Insurance Company (“ARIC”), a GBLI subsidiary, completed the disposition of ARIC’s Farm, Ranch, and Equine book of renewal business to Everett Cash Mutual. GBLI also announced that it agreed to sell ARIC to Everett Cash Mutual (ECM), which, subject to regulatory approvals and customary transactional conditions, is expected to close in or before the first quarter of 2023. GBLI and ECM anticipate that the renewal rights and acquisition transactions will further enhance ARIC’s provision of products and services to both ARIC’s policyholders and to ARIC’s agency partners.
ECM’s President and CEO, Randy Shaw, stated that “Everett Cash Mutual Insurance Co., founded in 1913, is committed to serving the insurance needs of the agricultural community.” Shaw added that “ECM’s acquisition of ARIC will shift ECM from a regional carrier to a national provider with combined gross written premium approaching $200 million. We look forward to engaging with American Reliable employees and agents in the coming days.”
David Charlton, GBLI’s Chief Executive, remarked, “GBLI will be working closely with ECM to assure that the renewal rights and acquisition transactions will be seamless for ARIC policyholders and ARIC’s agent partners. In that regard, we encourage ARIC’s agents to partner with ECM, who is a carrier dedicated to processing Farm, Ranch, & Equine insurance.” Charlton added that, “These transactions will also enable GBLI to further sharpen its focus on the company’s core small and middle market commercial specialty casualty businesses”.
Transaction Information:
In aggregate GBLI will receive approximately $85 million, including the release of capital currently supporting ARIC’s operations (over the course of the next 12 months). GBLI will receive $30 million for the sale of renewal rights and will receive an amount equal to surplus when ARIC is sold. Until ECM acquires American Reliable, ECM will be providing GBLI with 100% quota share reinsurance in respect of policies subject to the renewal rights agreement with ECM.
GBLI exited ARIC’s Manufactured Homes and Dwellings business in the fourth quarter of 2021, which was comparable in size to ARIC’s Farm, Ranch, & Equine business and generated comparable proceeds to GBLI upon its disposition.
Fox Paine & Company and Merger & Acquisition Services, Inc. served as GBLI’s financial advisors in connection with the Farm, Ranch, & Equine as well as the Manufactured Homes and Dwellings transactions. Skadden, Arps, Slate, Meagher & Flom LLP served as GBLI’s legal advisor in regard to both transactions. Philo Smith Capital Corporation served as ECM’s financial advisor, and Mette, Evans & Woodside served as legal advisor.