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As a part of its long term strategy to expand presence in the specialty reinsurance business Tower Group International, Ltd. (TWGP - Analyst Report) is buying American Safety Reinsurance, Ltd. (ASRe).
Based in Bermuda, ASRe is the reinsurance subsidiary of American Safety Insurance Holdings, Ltd. (ASI).
Tower Group will be buying ASRe from Fairfax Financial Holdings Limited (Fairfax Financial) for approximately $59 million. 
Tower’s buyout of ASRe will be completed upon Fairfax’s acquisition of New York-listed insurer American Safety Insurance (ASI) for $306 million.
After the acquisition of ASI, Fairfax will spin out ASRe to Tower Group International for $59 million.  The unit will then be integrated with Tower's Bermudian reinsurer Tower Re.
The acquisition will be completed by the second half of 2013. 
The acquisition will expand the operation of Tower Re which currently carries out the company’s specialty reinsurance business. Tower Re was formed in the first quarter of 2013, following the merger of Tower with Canopius.
Tower Re currently writes qualifying quota share reinsurance treaty business for Lloyd’s syndicates and property retrocessional excess quota share business underwritten with select partners. The acquisition with ASRe will add casualty-focused reinsurance business, which will complement Tower Re’s existing business. 
With the acquisition of ASRe, Tower will gain instant access to the former company’s skilled casualty underwriting, support staff and extensive network of reinsurance brokers and specialty insurance company clients in the U.S.
Tower expects the acquisition to bring in approximately $40 million of premiums. The buyout is also expected to be modestly additive to Tower’s earnings in 2013, with increasing contribution from 2014 onwards. 
Tower Group presently carries a Zacks Rank #3 (Hold). Property and casualty insurers , HCI Group Inc. (HCI - Snapshot Report), AXIS Capital Holdings Ltd. (AXS - Analyst Report) and Montpelier Re Holdings Ltd. (MRH - Analyst Report), among others, carry favorable Zacks Rank #1 (Strong Buy) and look impressive.

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