Acquisition

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Acquisition

(2) Acquisition

Effective January 1, 2015, we completed the acquisition of all of the capital stock of ProAg from CUNA Mutual Group for $102.4 million cash. ProAg writes multi-peril crop, crop hail and other named peril insurance. Crop insurance is a non-correlated line of business we strategically targeted to add to our diversified portfolio of specialty insurance businesses.

We completed our accounting for thisacquisition in the second quarter of 2015. The following table summarizes the fair values of assets acquired and liabilities assumed at the acquisition date:

Assets
Investments – Fixed maturity securities			$	8,008
Cash				18,979
Premium, claims and other receivables				179,451
Reinsurance recoverables				197,292
Ceded unearned premium				33,127
Other assets				72,347
	Total identifiable assets acquired			509,204
Liabilities
Loss and loss adjustment expense payable				202,265
Reinsurance, premium and claims payable				131,677
Unearned premium				56,946
Notes payable				15,004
Accounts payable and accrued liabilities				48,049
	Total liabilities assumed			453,941
		Net identifiable assets acquired		55,263
Goodwill				47,145
		Net assets acquired	$	102,408

The majority of these assets and liabilities related to ProAg’s reinsurance year 2014, which is 100% ceded to the FCIC and third party reinsurers (including CUNA Mutual Group) under existing reinsurance agreements. We expect settlement of reinsurance year 2014 amounts to occur with all parties during the fourth quarter of 2015.

We recognized $54.0 million of intangible assets and $47.1 million of goodwill, neither of which is tax deductible. Finite-lived intangible assets relate to agent relationships and ProAg’s trade name with fair values of $23.0 million and $8.0 million, respectively, which will be amortized over a useful life of 15 years and 10 years, respectively. Indefinite-lived intangible assetsof $23.0 million relate to state and federal insurance licenses, which will be reviewed annually for impairment. Intangible assets are included in other assets in our consolidated balance sheet. The goodwill primarily represents the value of ProAg’s assembled workforce and opportunities for future expansion utilizing ProAg’s infrastructure.