Sompo to acquire ARA

As climate change gains increasing prominence driving the demand for protection, Italian agricultural insurer Assicurazioni Rischi Agricoli VMG 1857 (ARA) has entered into an acquisition agreement with Japan’s Sompo Holdings.

ARA provides coverage against weather-related crop failures, including from hail, frost and droughts, and controls roughly 10 percent of the Italian agricultural insurance market. Sompo is expected to spend between USD27.3 million and USD45.5 million on the deal.

Agricultural insurance can also protect farmers against market fluctuations. Sompo is eager to make further inroads into the field, which is less vulnerable to economic cycles and which it considers a key growth driver alongside its auto and business insurance.

Sompo International currently earns about 20 percent of its premium income from agricultural insurance. It acquired Italian insurance broker A&A in 2018 and US-based Diversified Crop Insurance Services in 2020. This year, the group began offering insurance to help offset loss of income for Thai sugar cane farmers during droughts.