by Agnel Philip
CGB Enterprises, the closely held provider of transportation and storage services, agreed to buy Heartland Crop Insurance from Everest Re Group Ltd. to expand its offerings to the agriculture industry.
The seller will continue to bet on the business through a reinsurance arrangement with CGB, Bermuda-based Everest said in a statement Monday that didn’t disclose terms. The coverage guards farmers against weather-related setbacks or lower-than-expected revenue and is backed by the U.S. government.
Ownership has been shifting in the crop insurance industry as volatile commodity prices and pressure on government subsidies boosted risk for insurers. Wells Fargo & Co., Monsanto Co. and Deere & Co. are among the giant publicly traded firms that have retreated from the market in recent years. The buyer sells crop insurance and services to farmers in 38 states and will expand its reach and diversify its risks with the deal.
“We look forward to collectively accomplishing many of the goals we share together,” Ron Miiller, president of insurer CGB Diversified Services, said in the statement. “Our combined strength will make us a significant force in our industry in the years ahead.”
Everest Re also posted second-quarter earnings late Monday that topped analysts’ estimates for operating profit and revenue. The company announced a deal in 2011 to buy Heartland for $55 million.
To contact the reporter on this story: Agnel Philip in New York at [email protected]
To contact the editors responsible for this story: Dan Kraut at [email protected]
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