MADISON, Wis. (10/1/14)--CUNA Mutual Group announced Tuesday that it has reached an agreement to sell its crop insurance business, Ag Insurance Group (ProAg), to HCC Insurance Holdings Inc.
The transaction is expected to close in the first quarter of 2015, pending regulatory approval.
"This transaction allows our company to put even more focus on our core business lines serving consumers, credit unions, small plan advisors and other core customer groups," said Robert N. Trunzo, CUNA Mutual Group president/CEO. "It also ensures America's farmers can continue to count on ProAg for crop insurance coverage."
CUNA Mutual Group took over operation of ProAg in 2009, a deal which provided the cooperative insurance company with an opportunity to diversify during the fragile months following the economic downturn in 2008.
As its cornerstone business segments have seen strong growth of late, the transaction would allow CUNA Mutual to return its focus to those areas more central to the organization's long-term strategic plans.
The deal is contingent upon Houston-based HCC paying CUNA Mutual $110 million in cash, an amount that would be adjusted at closing.
Since 1926, ProAg has specialized in crop-protection products that help farmers grapple with losses resulting from natural causes such as drought, excessive moisture, hail, wind frost, insects and disease.
CUNA Mutual came on as ProAg's lead reinsurer and direct writer of crop insurance in 2006. In 2007, the insurance company bought a minority ownership in the crop insurance company, and in 2009 became the full owner.