'
ProgramBusiness
 
  


  1. News Articles
  2. Related News Articles
  3. Comments
News Article Details

Hallmark Financial Services, Inc. to Acquire State Auto National Insurance Company

Source: Hallmark Financial Services, Inc.


Posted on 10 Aug 2010

Facebook LinkedIn Twitter Google

Hallmark Financial Services, Inc. today announced the execution of an agreement for its wholly-owned subsidiary, Hallmark Insurance Company, to acquire State Auto National Insurance Company from State Auto Financial Corporation. State Auto National is an Ohio domiciled insurance company which annually writes approximately $37 million in non-standard personal automobile policies through independent agents in 21 states. Closing of the acquisition is subject to regulatory approval and other customary closing conditions.

The purchase price for the acquisition will be $14 million cash at closing plus an earn-out of up to $2 million. Hallmark expects to fund the acquisition out of working capital. The cash portion of the purchase price is subject to post-closing adjustment to the extent the statutory capital and surplus of SAN is greater or less than $10 million. In connection with the closing, State Auto National will enter into reinsurance agreements with an affiliate of the seller pursuant to which the affiliate will handle all claims and assume all liabilities arising under policies issued by State Auto National prior to the closing and during a transition period of up to six months following the closing.

Mark J. Morrison, President and Chief Executive Officer, said, “The purchase of State Auto National Insurance Company as a clean statutory entity, along with the policy renewals of its existing book of non-standard personal automobile business, will significantly expand our Personal Lines business unit into new states through an already existing agency distribution. The structure of the transaction allows us to realize immediately the benefit of our highly efficient personal lines platform that is tailor-made to meet the needs of the non-standard personal auto marketplace. Additionally, this transaction entails very little integration risk, as we will not be assuming any staff, operating platforms or run-off exposure from State Auto Financial Corporation’s existing operations.

“This is an exciting opportunity for us to accelerate our organic personal lines expansion efforts in key markets not yet entered or which are in the early stages of development,” said Brooks Davis, President of Hallmark’s Personal Lines business unit. “Although the business is non-core to State Auto Financial Corporation, it is very complementary to Hallmark’s personal lines portfolio from a product, distribution and geographic standpoint. Our strategy is to focus on specialty personal lines products, supported by the highest level of service at a competitive price. Our operational platform and use of technology are designed for efficiency which is expected to provide opportunities for margin improvement in the acquired book of business. We also expect to benefit from a significantly expanded agency network and intend to provide these agents with additional Hallmark personal lines specialty products.”


Comments

Post a Comment
If you are a Storefront / Tradingfloor user, click here to login.
Note: As a guest user, please fill out the form below to post a comment.
Post your comments here.
Name :
Email Address :
Captcha :
Comments :
Character left : 2000