NEW YORK (Bloomberg) — Ace Ltd., the Zurich-based insurer with operations in more than 50 countries, agreed to pay $1.1 billion in cash to buy a majority stake in Rain & Hail Insurance Service Inc. and expand coverage of crops in the US.

The price values the insurer at about 1.59 times its projected yearend book value of $840 million, Ace said in a presentation today on its website. Ace said the deal will add about 22 cents to earnings per share next year. Ace already holds about 20 percent of the common stock in the Johnston, Iowa-based insurer, which is majority-owned by employees.

Ace, led by chief executive officer Evan Greenberg, is adding to the business of protecting US farmers against losses after the government this year reduced subsidies for the policies.

The company said in July that the changes could work in favour of the largest insurers in the business against regional competitors. "It's a good example of Evan Greenberg's strategy of growing through all phases of the property-and-casualty pricing cycle," said Daniel Theriault, an analyst at New York-based Portales Partners LLC who advises investors to buy Ace shares. "They are already a big player in the agricultural crop business so it's a relatively low risk acquisition. It's a pretty good feat in this current environment."

Ace, which shuns shareholder buybacks, is expanding after remaining profitable through the credit crisis by sidestepping subprime mortgage-related securities. Greenberg also said late on Monday that Ace would buy Jerneh Insurance Bhd. for about $210 million to expand in Malaysia.

"Pipelines of opportunity are pretty robust right now" for acquisitions, Greenberg said in a conference call in July.

Ace advanced 68 cents, or 1.2 percent, to $57.36 in New York Stock Exchange composite trading. The company has climbed about 14 percent this year, beating the Standard & Poor's 500 Index, which is little changed. Ace competes with market leader Wells Fargo & Co., Australia's QBE Insurance Group Ltd. and American Financial Group Inc. selling protection to farmers. Rain & Hail, with a market share of about 21 percent, ranks second to a Wells Fargo business, according to data released by Ace in the presentation.

Rain & Hail posted net income last year of $199 million, according to Ace. The company has about 400 full-time employees and sells coverage through a network of more than 11,000 agents.

"This is a business we know well," Greenberg said in the statement. "We project a return on capital in excess of our 15 percent hurdle rate."

On the Jerneh acquisition, Greenberg said: "This transaction provides a good strategic fit and complements our current presence in Malaysia.

"The addition of Jerneh Insurance Bhd. will be accretive to Ace's earnings and book value per share."