Business Moves

Fairfax/Odyssey Re

Fairfax Financial Holdings Ltd. will sell $1 billion in stock to fund the purchase of the shares of Odyssey Re Holdings Corp. that it does not already own. Fairfax reduced its stake in the reinsurer a few years ago to raise money.

The Toronto-based company plans to sell 2.88 million shares at $347 each to fund the reacquisition. Fairfax shares closed at that price on Sept. 4 in New York.

Fairfax already owns about 73 percent of Connecticut-based Odyssey Re. It plans to buy the remaining shares for $60 each, a premium of about 20 percent over the price at the time of the announcement.

Donegal/Southern Mutual

Pennsylvania-based property/casualty insurer Donegal Mutual has agreed to an affiliation that brings Southern Mutual Insurance Co. into Donegal’s insurance pool and gives the Georgia insurer additional products to sell.

Donegal Mutual has agreed to provide quota share reinsurance to Southern Mutual for up to 100 percent of its current and future business. Donegal Mutual will include this business in its pooling agreement with Atlantic States Insurance Co., a subsidiary of Donegal Group Inc.

Closing of the affiliation is subject to a number of conditions, including approval by the Georgia Commissioner of Insurance. The firms expect the transaction to close in the fourth quarter of 2009.

Donegal Mutual and Atlantic States have participated in a pooling agreement since 1986 under which substantially all of their premiums, losses and expenses are pooled and each company is allocated a given percentage of the combined underwriting results.

The proposed transaction includes other features: Donegal Mutual would purchase a surplus note of Southern Mutual in the principal amount of $2,500,000; Donegal Mutual would license to Southern Mutual Donegal Mutual’s WritePro and WriteBiz technology, which permits agents to underwrite applications and issue policies automatically through the internet and enhances ease of use;

Southern Mutual will retain its mutual status, its Georgia domicile and its current office location with the same management, employees and agents; Donegal Mutual would assist Southern Mutual in offering additional insurance products and coverages

AmTrust/Swiss Re

New York-based AmTrust Financial Services, Inc. has agreed to acquire CyberComp, the workers’ compensation business unit of Swiss Re, in a renewal rights transaction.

Serving the workers’ compensation needs of small to medium-sized employers in 26 states, CyberComp distributes through a network of 13 regional wholesale agencies and more than 600 retail agencies.

In the 12 month period ending June 30, 2009, net written premium totaled approximately $100 million. CyberComp is an Internet-based monoline workers’ compensation facility. CyberComp allows agents to enter data, get quotes and issue policies in minutes. adopters of this technology

Hunter/Loiselle

Two Rhode Island insurance agencies have launched an affiliation group and are searching for potential partners. Hunter Insurance and Loiselle Insurance Agency have created the Trusted Insurance Alliance (TIA) to “capitalize on the shared performance of participating independent insurance agencies,” the group said in a release.

TIA is seeking to independent agencies to join it. Affiliates will maintain independent ownership, but will also receive opportunities and benefits from aggregated written and earned premiums and loss results. They also receive access to TIA charter company partners: Beacon Mutual Insurance, Merchants Insurance Group, Narragansett Bay Insurance, Ohio Mutual Insurance Group, Providence Mutual and Peerless Insurance.