HCC Insurance Holdings has acquired GB Kenrick & Associates for an undisclosed cash consideration.
Kenrick, formed in 1985, is an insurance underwriting agency located in Auburn Hills, Michigan, and is said to be recognised as one of the premier underwriters of municipal insurance.
The company is expected to write more than $50m (£27.4m) in premium this year.
Founders David P Kensler and Boderick J Donaldson and their team will remain with the company following closing.
Stephen L Way, chairman and chief executive officer of HCC, said: “Dave and Rick helped write the book on municipal insurance and we could not have a better introduction to this new line of business for HCC.”
Dave Kensler said: “We are very excited about our future with HCC, who will provide the capital and resources necessary for us to expand our operations into other states."
Following the acquisition, Kenrick will operate independently and expects to double its business to more than $100m (£54.7m) premium in the next few years.