Bermuda insurance company BF&M Ltd has agreed to buy Cayman-based insurer Island Heritage for around $68 million in cash.BF&M chief executive officer John Wight said last night the deal, which is expected to close in the second quarter, would help the company achieve its aim of becoming a major insurer in the Caribbean.Island Heritage is majority owned by Flagstone Reinsurance Holdings SA, the Luxembourg-based reinsurer with underwriting operations in Bermuda. Flagstone will receive around $40.8 million for its 60 percent stake.“We are proud to be announcing the acquisition of a market leader in the Caribbean,” Mr Wight said last night.“It is BF&M’s strategy to enhance our footprint in the Caribbean region. The acquisition by BF&M of Island Heritage is part of the company’s strategic goal of becoming a major insurer in the Caribbean region.“Island Heritage has a talented team of experienced insurance professionals, and we look forward to working collaboratively with them to enhance their product and service offerings.”Flagstone, which bought a controlling interest in Island Heritage in July 2007, has been looking to sell off the Caymanian insurer for several months as part of a major restructuring.Heavy catastrophe losses drove Flagstone to a $326 million net loss in 2011.“The sale of Island Heritage, coupled with the planned divestment of our Lloyd’s operations, further enables us to streamline our core businesses as we continue to execute on our strategic path forward,” Flagstone chief executive David Brown said.Island Heritage provides property, casualty and auto insurance across the Caribbean. BF&M already has other interests in the Caribbean, namely a 51.6 percent stake in the Insurance Corporation of Barbados Ltd.