QBE Insurance Group Acquires NAU Country Insurance
QBE Insurance Group Ltd. (QBE.AU) today announced that they have acquired a U.S. crop insurer, NAU Country Insurance Co. for US$565 million, a price dubbed "cheap" by a leading American analyst.
The analyst pointed out that the price-to-earnings metrics would prove beneficial for QBE in the long run. A QBE official said that the price is equivalent to seven times 2010 after-tax profit estimated by NAU.
Talking to reporters, QBE Chief Executive Officer Frank O’Halloran said,“The acquisition is in line with QBE’s long term strategy of acquiring specialist businesses to further enhance our significant product diversification and distribution.
Synergies are expected from savings in reinsurance costs and cross selling.” QBE is Australia's insurance group by market value, while NAU is US' third largest writer of Multi-Peril Crop Insurance.
