Swiss insurer Zurich Financial Services AG said Friday that an American subsidiary intends to buy Bristol West Holdings Inc. for around $712 million, helping to beef up the Swiss insurer’s U.S. operations.
Bristol West, an auto insurer based in Davie, Fla., confirmed that it had agreed to be acquired by the Zurich Financial’s wholly owned subsidiary Farmers Group Inc., which offers a range of insurance and other products. The cash offer to Bristol West shareholders works out to $22.50 a share.
As part of the transaction, Farmers will immediately sell the underlying insurance business to the Farmers Exchanges, which Farmers Group manages but doesn’t own.
“Adding Bristol’s auto insurance business to the Farmers platform is a great fit and contributes to increase our outreach,” said Farmer Group Chief Executive Paul Hopkins.
Jeffrey J. Dailey, chief executive of Bristol West, said, “We are delighted that Zurich and Farmers have recognized the strength of the company we have built over the last several years, and see it as a way of enhancing Farmers’ non-standard auto insurance business.”
Bristol West provides liability and physical damage insurance in 22 states, focusing exclusively on private passenger cars.
In 2006, the company reported gross written premiums of around $600 million and a combined ratio of 91 percent. A level below 100 percent means the company is profitable.
Zurich Financial said the closing of the transaction is subject to approval by Bristol West stockholders and regulatory approvals.