Validus acquires ADM crop insurance unit for $127.5m

Validus Holdings has agreed to buy the crop insurance general agent of Archer Daniels Midland (ADM) for $127.5 million in cash.

The Crop Risk Services (CRS) business is based in Illinois, with $548.9 million gross premiums written for the 2016 reinsurance year.

Following the transaction, expected to close during the second quarter of 2017, CRS will operate as part of the Western World Insurance Group.

Ed Noonan, chairman and chief executive officer of Validus, said: "I’m very pleased to welcome CRS to Validus. CRS is a high quality crop insurance provider that has achieved excellent growth in recent years.

"Validus will benefit from CRS’s commitment to provide superior customer service to agents and farmers via their leading technology capabilities. The addition of CRS complements Validus’ existing agriculture book and participation in this market is a logical step as Validus continues to expand our presence in US primary specialty lines.

"We are excited by the long–term partnership with ADM as this transaction further provides the unique opportunity of a marketing services agreement with one of the largest agricultural processors in the world."

Joe Taets, president of ADM’s agricultural services business unit, said: "We’re pleased to have reached an agreement that includes a marketing services agreement that will allow ADM and Validus to work together to continue to offer customers a full array of crop insurance products as well as ADM’s grain marketing services.

"We are pleased to have found a buyer in Validus that is committed to running—and growing—the business, and we look forward to continuing to work with Validus and the CRS sales team and their customers across the country."

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