IGF Insurance Acquires North American Crop Underwriters
Indianapolis-based Symons International Group Inc., says its crop insurance subsidiary, IGF Insurance Company (IGF), has completed the acquisition of North American Crop Underwriters (NACU), a Henning, MN-based managing general agency which focuses exclusively on crop insurance.
"We are very pleased to be able to acquire this prominent, well established producer of crop insurance," says Alan G. Symons, CEO. "This acquisition allows our crop insurance subsidiary, IGF, to expand its base in key Midwestern and Western states. Further, this acquisition will also afford IGF a new marketing channel for its three phases of agricultural business: Geo AgPlus, AgPI, and our traditional crop insurance coverages. NACU has a major presence in the upper Midwest and this acquisition will significantly enhance IGF's presence in this major crop-growing region."
Geo AgPlus is a new fee-for-services product offered by IGF, which focuses on providing precision farming data and software to the agricultural community. It combines scientific grid soil sampling and global positioning satellite mapping to provide the farmer with soil sampling results combined with fertility maps, as well as the software necessary to direct today's new precision farming implements. Grid soil sampling, when combined with precision farming, allows the farmer to apply the precise amount of fertilization to a discrete area, thus balancing the soil for maximum crop yield. Precision farming increases farmers' yields, reduces the cost of unnecessary fertilization, and helps the environment by reducing the overflow of unnecessary fertilization into the ecosystem.
AgPI is a production interruption coverage newly offered by IGF to protect agricultural processors and other farm industry intermediaries from production shortfalls in their service area. AgPI protects businesses that depend upon a steady flow of a crop or crops to stay in business. This protection is available to those involved in agribusiness who are a step beyond the farm gate, such as elevator operators, custom harvesters, cotton gins, and businesses that are dependent upon a single supplier of products (i.e., popping corn). These businesses have traditionally been able to buy normal business interruption insurance to protect against on-site calamities such as fire, windstorm, or tornado.
Dennis Daggett, IGF's president, says, "The ability to market our new products as well as our traditional crop covers through the NACU system is a very exciting development for the company. Bringing NACU into the IGF family strengthens IGF's position in the upper Midwest, and especially the very important Red River Valley." NACU currently conducts business in the states of Minnesota, North Dakota, South Dakota, Illinois, Idaho, Kansas, Montana, Nebraska, Oklahoma, Washington, and Wisconsin. NACU currently produces approximately $45,000,000 of premiums annually of combined Multi Peril Crop Insurance and Crop Hail Insurance.
The majority of NACU's traditional crop insurance premium had already accrued to the benefit of IGF pursuant to the acquisition of CNA's crop operations. However, the recent acquisition by IGF of CNA's crop insurance business did not apply to 50 percent of NACU's underwriting gain or any of its processing fee-based income. The acquisition of NACU will capture that remaining 50 percent underwriting gain as well as NACU's processing-fee income. These amounts are in addition to the premium volume, which was acquired via the transaction with CNA last March.
The acquisition price for NACU is $4,000,000, with $3,000,000 having been paid at closing and $1,000,000 payable July 1, 2001, without interest.