The Hartford Financial Services Group Inc. completed its previously announced acquisition of Navigators Group Inc. in an all-cash transaction for $70 per share, or $2.2 billion, including expenses.
The combined property and casualty business, both in the U.S. and internationally, will be marketed under The Hartford brand. Reinsurance and U.S. wholesale businesses will be marketed as "Navigators, a brand of The Hartford." The company will transition to the new branding convention over time.
Following the consummation of the merger, Navigators Insurance Co. and certain of its affiliates, which became wholly owned subsidiaries of The Hartford, entered into an aggregate excess of loss reinsurance agreement with National Indemnity Co., a subsidiary of Berkshire Hathaway Inc.
The agreement provides that the Navigators companies will pay National Indemnity a reinsurance premium of approximately $91 million in exchange for reinsurance coverage of $300 million of adverse net loss reserve development that attaches $100 million above the Navigators companies' existing net loss and allocated loss adjustment reserves as of Dec. 31, 2018 of $1.82 billion for accidents and losses prior to Dec. 31, 2018, subject to limited exceptions.
The agreement will be accounted for as retroactive reinsurance in The Hartford's U.S. GAAP financial statements and is expected to result in a loss on reinsurance of approximately $72 million, after tax, in the second quarter.