QBE Group has advanced its product diversification drive with an agreement to acquire US specialist insurer NAU Country Insurance.

NAU is the third-largest writer and manager in the US of multi-peril crop insurance, a federally regulated insurance program run by the US Federal Crop Insurance Corporation to provide protection against weather-related and other unavoidable causes of crop loss.

Last year NAU wrote $US976 million ($1.05 billion) of gross earned premium. It controls about 11% of the US multi-peril market and earns 95% of its gross premium from the cover.

With an impressive combined operating ratio of 61.3%, NAU last year earned net profit of $US92.5 million ($99 million).

QBE said last week it has agreed to pay $US565 million ($607 million) for the business. The acquisition is subject to regulatory approvals and is due to be completed in July.

“The acquisition is in line with QBE’s long-term strategy of acquiring specialist businesses to further enhance our significant product diversification and distribution,” CEO Frank O’Halloran said.

“Synergies are expected from savings in reinsurance costs and cross-selling of QBE’s various agricultural insurance products to NAU’s client base.”

QBE plans to fund the acquisition from existing resources and, subject to catastrophes not exceeding the allowances made, the purchase will be earnings per share accretive from the start.