Bermuda-based Armour Group yesterday announced that an affiliate had agreed to acquire the run-off business of OneBeacon.OneBeacon, whose holding company is in Bermuda and which is three-quarters owned by Bermuda-based White Mountains Insurance Group, expects to book an after-tax charge of $101 million relating to the deal.Armour Group, which was set up in Bermuda in 2007 by founding principals Brad Huntington and John Williams, focuses on identifying structuring and transacting value opportunities within distressed, discontinued and other specialty sectors in the insurance and reinsurance industry. distressed, discontinued and other specialty sectors of the global insurance and reinsurance marketplaceThe transaction involves transfer to Armour Group affiliates of staff, office space and certain pieces of infrastructure as well as certain legal entities which will contain the assets, liabilities (including gross and ceded loss reserves), and capital supporting the OneBeacon, US-focused runoff business.As of September 30, 2012, the gross reserves associated with the run-off business were in excess of $2.2 billion. The transaction requires regulatory approvals and is expected to close in 2013.Mr Huntington, chairman and CEO of the Armour Group said: “We are extremely pleased to have entered into this agreement with OneBeacon which, in addition to the capital entities, brings US staff and infrastructure and represents a significant milestone in the development of Armour Risk, Armour Group’s servicing business.”Armour Group is a Bermuda based group of insurance, reinsurance, investment management and service companies which specialise in the creation and implementation of solutions and acquisitions within the distressed, discontinued and other specialty sectors of the global insurance and reinsurance marketplace. Its principals, Brad Huntington and John Williams have more than 50 years combined experience in the insurance and reinsurance markets.OneBeacon CEO Mike Miller said: “The sale of our runoff business is the final step in our transformation to a pure Specialty company. This complete exit from our legacy liabilities is a major step in that transition.“The charge associated with the sale, while significant on a GAAP basis, is in line with our view of the economics of running off the liabilities over time.“Importantly, this transaction will free up over $100 million of capital, net of the loss on the transaction, further enhancing our financial flexibility and allowing us to focus our full attention on building on our already high-performing Specialty results.”Beginning with the company’s third quarter financials, the runoff business will be accounted for as held for sale and as a discontinued operation.OneBeacon expects to record approximately $107 million of after-tax losses in its third quarter results related to its runoff business. In addition to the $101 million related to the transaction, OneBeacon will record a $6 million net loss from discontinued operations driven primarily by adverse prior year loss reserve development related to a legacy assumed reinsurance treaty.Edwards Wildman advised Armour in the transaction.