Aspen sells crop unit AgriLogic; agrees stake in new crop reinsurer
Aspen has made a strategic investment in a new crop reinsurer in partnership with CGB Diversified Services but has sold AgriLogic, its own US crop insurance business, a part of the deal.
Under the terms of this partnership, Aspen has acquired a 23.2 percent stake in a newly formed company, Crop Re Services, which is responsible for directing the placement of reinsurance on behalf of CGB DS. The remaining 76.8 percent of Crop Re is owned by CGB DS.
In exchange for its stake in Crop Re, Aspen has sold AG Logic Holdings, its US crop insurance business, to CGB DS for $68.4 million.
Aspen will receive rights to provide quota share reinsurance capacity, in proportion to its shareholding of Crop Re, on the combined crop insurance portfolios of AgriLogic and CGB DS.
Aspen will also have access to additional crop reinsurance premium by bringing its reinsurance expertise to a substantially larger, faster growing, and more diversified crop insurance business.
The annual combined gross written premium of AgriLogic and CGB DS was approximately $1.1 billion for the 2017 crop reinsurance year, making it one of the largest portfolios in the U.S. crop insurance market.
Chris O’Kane, Aspen’s group chief executive, said: “We are excited by the strategically compelling opportunity brought to us by CGB DS, a highly-respected company in the crop insurance industry. Our investment in Crop Re provides Aspen with the opportunity for further growth through access to a much larger and more diversified portfolio of business. AgriLogic is an outstanding business and, together with CGB DS, will be able to progress more rapidly to the next stage of its development.”
Rick Pemberton, executive vice president and CFO for CGB Enterprises, said: “Forming this strategic partnership with Aspen is a natural fit for our crop insurance platform and a true win for both parties. AgriLogic is an excellent business with strong customer-centric focus, and together we will continue to provide world-class service and provide innovative risk management solutions to our agents and customers. We are delighted to officially welcome the AgriLogic team to CGB Diversified Services.”
