Business Moves

Palisades, National Atlantic

A subsidiary of Palisades Safety and Insurance Association plans to acquire National Atlantic Holdings Corp., including its subsidiary, The Proformance Insurance Co.

Under the agreement, each outstanding share of common stock of National Atlantic will be canceled and converted into the right to receive $6.25 in cash per share.

The closing is expected to occur in the third quarter of 2008. The merger is subject to the approval of National Atlantic’s shareholders and regulatory approvals. The merger is not subject to a financing condition.

Both insurers write only in New Jersey. The Palisades Group is the fifth largest personal automobile carrier and second largest independent agency writer of automobile insurance in New Jersey. It is a member of the Mass.-based Plymouth Rock group of companies.

Argo Group’s Trident, Massamont Agency

Trident Insurance Services, a unit of specialty insurer Argo Group International Holdings Ltd., has acquired Mass.-based Massamont Insurance Agency, Inc., which specializes in insurance programs for public entities.

This combination immediately expands Argonaut’s public entity footprint into New England. The combination nearly doubles its employee count to 162 and will boost gross written premium by 65 percent, Trident officials said. Terms of the deal were not disclosed.

Hilbert “Van” Schenck II will assume the role of president of Trident while continuing his leadership of Massamont.

The transaction is the evolution of a managing general agency (MGA) partnership established last year. The new combined organization will do business under the Trident and Massamont names and will have operations in San Antonio, Boston, Greenfield (Mass.) and Chicago.

Michael Arledge, president of Argonaut Select Markets, the Argo Group business segment that includes Trident and Massamont, said the deal makes his firm the second largest writer of small-to- medium-size public entities in the U.S.

In addition to adding to Trident’s public entity business, the Massamont book also includes additional automobile specialty programs.

Argo Group is the combined international holding company resulting from merger of Argonaut Group, Inc. and PXRE Group, Ltd.

Farmers Insurance, Zurich Small Business

Truck Insurance Exchange, a unit of Farmers Insurance Group, will purchase the rights to renewals on Zurich North America Commercial’s Small Business Solutions (SBS) $800 million book of business. Also, Farmers will assume management of the SBS business.

Farmers Group, Inc. is a wholly owned subsidiary of Zurich Financial Services. Policies are underwritten and issued by the Farmers Exchanges and their subsidiaries, which Farmers Group, Inc. manages but does not own.

Farmers Small Business Insurance unit, which writes through the Exchange, is licensed to operate in 41 states — a “core” 29 serviced by Farmers exclusive agents and an additional 12 states (mainly in the East) serviced by independent agents.

The Farmers Exchanges underwrite more than 250,000 small businesses and produced $1.6 billion in gross written premium in 2007.

The SBS book consists of three primary lines of business: business owner’s policy for property, general liability and umbrella, first-and-third-party auto and workers’ compensation — and is sold in 49 states plus the District of Columbia.

The first exercise of rights to access renewals is estimated to occur within 18-to-24 months after the transaction closes. The transaction is expected to close in the second quarter.

Berkshire Hathaway, White Mountains

Warren Buffett’s Berkshire Hathaway Inc. will sell its 16.3 percent stake in White Mountains Insurance Group Ltd. in a transaction valued at $836 million, seven years after investing in the Bermuda-based insurer, White Mountains said.

Berkshire will exchange its 1.724 million shares for about $751 million of cash plus a unit that holds two businesses, Commercial Casualty Insurance Co. and International American Group Inc., with $435 million of assets and $58 million of adjusted shareholder equity, White Mountains said. The transaction is valued at $485 per share, it said.

Ray Barrette, White Mountains chief executive, said the agreement lets the company exit businesses with potentially volatile reserves, use capital more efficiently and redeem stock at a small premium to book value. White Mountains would have about 8.8 million shares after the transaction.

Berkshire invested $300 million in White Mountains in 2001.

Hanover, AMGRO

Worcester, Mass.-based The Hanover Insurance Group, Inc. said it will divest its non-insurance, premium finance subsidiary, AMGRO, Inc. and its subsidiaries, to Premium Financing Specialists, Inc. of Missouri.

Premium Financing Specialists is an independent premium finance provider. At year-end 2007, AMGRO represented about $6 million of The Hanover’s $2.3 billion in shareholders’ equity.