American Financial Group, Inc. (NYSE: AFG) announced today that it has reached a definitive agreement to acquire ABA Insurance Services Inc. (ABAIS) from American Bankers Mutual Insurance, Ltd. (ABMI). Based in Shaker Heights, Ohio, ABAIS is a market-leading provider of D&O and other complementary insurance solutions for banks, small businesses and nonprofit organizations, with a history that dates back thirty years. This acquisition will further strengthen Great Americans leadership position in targeted Specialty Casualty classes of business.
Under the terms of the agreement, AFG will pay ABMI approximately $28 million in cash at closing. This business is expected to contribute approximately $50 million in net written premiums on an annual basis. The transaction is expected to close in the fourth quarter, following customary regulatory approvals.
Following the transaction, ABAIS will continue to operate under the ABAIS brand and will become Great American Insurance Groups 34th specialty property and casualty (P&C) business unit.
Carl H. Lindner III, Co-CEO of American Financial Group commented, With the acquisition of ABAIS, we will expand our ability to offer specialty P&C insurance offerings through the long-standing leadership of ABAIS in the banking industry and their focus on commercial coverages for small businesses and nonprofits. ABAIS has a long track record of underwriting success and profitability. We are pleased with this addition to our portfolio of diversified, specialty P&C businesses.
John N. Wells, President and CEO, ABAIS stated: We are excited to join Great American Insurance Group. Our talented team of underwriting, claims and customer service professionals is a stable source of insurance for banks, small businesses and nonprofit organizations. We will continue to be endorsed by the American Bankers Association and 31 state bankers associations and maintain our relationship with ABMI.
About American Financial Group, Inc.
American Financial Group is an insurance holding company, based in Cincinnati, Ohio with assets over $60 billion. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of fixed, fixed-indexed and variable-indexed annuities in the retail, broker dealer, financial institutions and registered investment advisor markets. Great American Insurance Groups roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.
Forward Looking Statements
This press release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-looking and are based on estimates, assumptions and projections. Examples of such forward-looking statements include statements relating to: the Company’s expectations concerning market and other conditions and their effect on future premiums, revenues, earnings, investment activities and the amount and timing of share repurchases; recoverability of asset values; expected losses and the adequacy of reserves for asbestos, environmental pollution and mass tort claims; rate changes; and improved loss experience.
Actual results and/or financial condition could differ materially from those contained in or implied by such forward-looking statements for a variety of reasons including, but not limited to: changes in financial, political and economic conditions, including changes in interest and inflation rates, currency fluctuations and extended economic recessions or expansions in the U.S. and/or abroad; performance of securities markets, including FIA option costs; new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in AFGs investment portfolio; the availability of capital; regulatory actions (including changes in statutory accounting rules); changes in the legal environment affecting AFG or its customers; tax law and accounting changes; levels of natural catastrophes and severe weather, terrorist activities (including any nuclear, biological, chemical or radiological events), incidents of war or losses resulting from civil unrest and other major losses; development of insurance loss reserves and establishment of other reserves, particularly with respect to amounts associated with asbestos and environmental claims; availability of reinsurance and ability of reinsurers to pay their obligations; trends in persistency and mortality; competitive pressures; the ability to obtain adequate rates and policy terms; changes in AFGs credit ratings or the financial strength ratings assigned by major ratings agencies to AFGs operating subsidiaries; the impact of the conditions in the international financial markets and the global economy (including those associated with the United Kingdom’s expected withdrawal from the European Union, or “Brexit”) relating to AFGs international operations; and other factors identified in AFGs filings with the Securities and Exchange Commission.
The forward-looking statements herein are made only as of the date of this press release. The Company assumes no obligation to publicly update any forward-looking statements.