Bermuda-based RenaissanceRe Holdings Ltd. has struck a deal to buy the leading casualty underwriter for the explosives industry, as the Bermuda catastrophe reinsurer enters the business of writing specialty property and casualty insurance.

RenaissanceRe is acquiring the operating subsidiaries of Nobel Insurance Ltd.

for $54.1 million in cash and has pledged to provide up to $8.9 million of limited recourse financing to Nobel to support certain of Nobel's obligations in its planned liquidation.

Nobel intends to liquidate and distribute cash proceeds to its stockholders of $14 a share, representing about $63 million in the aggregate, although the timing and manner of distribution has not been decided.

Nobel's Nasdaq trading price last week was $13.75.

RenaissanceRe, which has established a US holding company to hold the Nobel operating companies, said its money-management and risk-analysis capabilities will help Nobel's business of providing property and casualty insurance for certain industries and for low-cost homes.

The deal will give RenaissanceRe a business that generated $83.7 million in gross premiums last year. Nobel had equity of $43.7 million on September 30 under Generally Accepted Accounting Principles.

In connection with the transaction, Nobel's lead casualty reinsurer, American Re-Insurance Co., and Inter-Ocean Reinsurance Co. Ltd., have agreed to provide reinsurance for casualty business acquired from Nobel with respect to future and prior accident years.

Consummation of the acquisition is subject to the customary conditions, including the approval by Nobel's shareholders and the receipt of regulatory and other third party approvals.

"Having had an excellent relationship with Nobel as their lead catastrophe reinsurer, we have confidence in their management team'' said James N.

Stanard, RenaissanceRe's chairman, president and CEO in a statement.

"This transaction combines the skills of our organisations. RenaissanceRe Holdings provides catastrophe risk analytic and capital management skills.

Nobel provides an operating platform for primary specialty insurance business.'' RenaissanceRe Holdings executive vice president responsible for primary insurance, Keith S. Hynes, said: "We are looking forward to working with Nobel in the development of their specialty insurance businesses. Nobel has developed an excellent book of low-value dwelling business and is the leading casualty underwriter for the explosives industry. Nobel has 20 years of experience in these franchise businesses.'' Nobel's president and CEO Jeffrey K. Amsbaugh said: "We are happy to be joining RenaissanceRe Holdings' group. Being part of the group will provide us with enhanced risk management and capital management skills and resources. The Nobel management team is very supportive of this transaction.'' Nobel's principal business is the service and underwriting of commercial property, casualty and surety risks for specialised industries, and personal lines property coverage for low-value dwellings.

The company's commercial property business is marketed nationally while its personal lines/low-value dwelling business has been focused on the Southeast.

Nobel Insurance Co., the principal operating unit, is Texas-domiciled and admitted in all 50 states of the US.

The consolidation is the latest in an effort among reinsurers to build revenue and reduce costs by acquiring rivals and other businesses that make a good strategic fit.

Reinsurance is an agreement to cover some of a primary insurer's claims in exchange for a share of its premiums. RenaissanceRe stock rose 1 3/16 last week to 42 9/16.