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Everest Re Closes Heartland Sale, Boosts Crop Insurance

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Everest Re Group, Ltd. recently closed the sale of its U.S. crop insurance company, Heartland Crop Insurance, Inc., to CGB Diversified Services, Inc. The company received $49 million as sale proceeds.

Concurrently, Everest Re entered into a long-term reinsurance relationship with CGB Diversified Services. Per the agreement, the property and casualty (P&C) insurer to provide quota share reinsurance capacity on the combined crop insurance portfolio of the Diversified/Heartland companies.

CGB Diversified Services is well known for being the fastest growing crop insurance companies in the U.S. Currently, farmers across 38 states receive the crop insurance products and services provided by the company. The acquisition of Heartland Crop Insurance will support the expansion of its product and services portfolio. Also, after the completion of this deal, the company is likely to witness a significant increase in its market share in a number of key states.

Everest Re, on the other hand, will gain access to a wider, more diversified, crop insurance portfolio through its association with CGB Diversified Services, owing to the strong market penetration of the latter. We expect this strategic initiative to help Everest Re diversify and thrive in the crop insurance business much more quickly along with growing its economies of scale.

The completion of the transaction will result in the collective accomplishment of the common goals shared by Heartland Crop Insurance and CGB Diversified Services. In addition, the combined strength of the companies will be a force to reckon with in the industry in the near future.

Zacks Rank and Stocks to Consider

Currently, Everest Re carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space include Allied World Assurance Company Holdings, AG (AWH - Free Report) , Argo Group International Holdings, Ltd. and National Interstate Corporation (NATL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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