Alleghany to acquire workers comp underwriter

NEW YORK--Property/casualty insurer Alleghany Corp. said Monday it has reached agreement to acquire Employers Direct Corp., an Agoura Hills, Calif.-based workers compensation insurance holding company, for $190 million.

Employers Direct, founded in 2002, writes California workers comp insurance through its wholly owned subsidiary, Employers Direct Insurance Co.

In a statement, Weston M. Hicks, president and chief executive officer of New York-based Alleghany, said: "Our agreement to acquire EDC reflects Alleghany's strategy of investing in well-positioned and well-managed financial services companies at prices we believe are reasonable. We believe that EDC's unique operating model has good growth prospects, and the addition of a workers compensation insurer to our existing portfolio of insurance companies will provide balance to our risk portfolio."

James Little, who will remain president and CEO of Employers Direct, said, "Alleghany's investment will help (Employers Direct) continue to grow and serve the California workers compensation market even more effectively."

While financial statements for 2006 were unavailable Monday, in 2005 Employers Direct had a net premium income of $155.9 million and a combined ratio of 82.5%.

The acquisition, subject to regulatory approval, is expected to close in the third quarter, the companies said.