Swiss insurer ACE acquires US Rain and Hail for $1.1 bn, Jerneh for $200 mn

Leading global insurer, Switzerland's ACE Limited, agreed yesterday to acquire all of the outstanding common stock of the US crop insurer Rain and Hail Insurance Service Inc (Rain and Hail) that it currently does not own, for approximately $1.1 billion in an all-cash transaction, ACE said in a statement.

Iowa-headquartered Rain and Hail, a pioneer in crop insurance in the US since 1919, and the second largest crop insurance underwriter, providing comprehensive multiple peril crop and crop-hail insurance protection to customers in the US and Canada. ACE currently owns around 20-per cent stake in Rain and Hail.

Further to closing of the transaction, Rain and Hail would continue to operate as a separate entity within the company's ACE Westchester division and Insurance-North America operations, the statement said.

ACE chairman and chief executive officer Evan Grenberg said, ''This transaction is a natural extension of our long-term, valued relationship with Rain and Hail and our company's specialty lines focus.''

ACE Group expects the deal to be financially attractive to the company's shareholders, and it will produce results that are immediately accretive to its earnings, return on equity and book value per share.

''This is a business we know well, and we project a return on capital in excess of our 15-per cent hurdle rate,'' Greenberg said.