Eastern Insurance to Buy Employers Security for $14.9 Million

LANCASTER, Pa., Aug 08, 2008 (A. M. Best via COMTEX) -- EIHI | Quote | Chart | News | PowerRating -- Eastern Insurance Holdings Inc. has agreed to acquire Employers Security Holding Co. and its subsidiaries for about $14.9 million. The buy will expand Eastern's workers' compensation insurance operations in Indiana and some other Midwestern states, Eastern said.

The total cost includes assumption of $2.9 million in debt, while the $12 million cash price will be financed from its operating subsidiaries, Eastern Insurance (NASDAQ: EIHI | Quote | Chart | News | PowerRating) said. The transaction requires regulatory approvals and approval by Employers Security's shareholders. It's expected to close late in the third quarter.

Through its subsidiaries, the Lancaster, Pa.- based Eastern Insurance operates a domestic casualty insurance group that sells workers' compensation insurance, life and health insurance, specialty reinsurance and offers third-party claims administration.

Bruce M. Eckert, chief executive officer of Eastern Insurance, in a statement Employers will expand its workers' compensation insurance products to Midwest territories with "favorable workers' compensation operating environments."

Eastern Alliance Insurance Group has a Best's Financial Strength Rating of A- (Excellent). Eastern Life has a Best's rating of A- (Excellent).

(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)

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