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ACE Ltd.'s $1.1 billion deal to acquire the remaining stock of Rain & Hail Insurance Service Inc. should catapult it over Wells Fargo & Co.'s Rural Community Insurance Co. to become the largest U.S. writer of multiple peril crop insurance, according to SNL data.
Industry observers suggested that the move could prove a wise one, despite scheduled cuts to the Federal Crop Insurance Program that could impact the profitability of its insurance company partners.
Under the deal, set to close by year's end, ACE will acquire the 80% of Rain and Hail's outstanding common stock that it does not already own, bringing Agri General Insurance Co. and the Rain and Hail LLC managing general agency under ACE's corporate umbrella. Ace already was Rain and Hail's largest reinsurance partner, accepting $355.1 million of the company's $453.6 million of total reinsurance cessions in 2009, according to SNL data.
Following the deal's announcement, A.M. Best placed...