The Baldwin Group has signed a note purchase agreement to raise $110m through surplus debentures to finance the launch of its reciprocal insurance exchange.
Of this, $95m will be funded by Gallatin Point Capital, with the balance provided by Baldwin affiliates.
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The Builder Reciprocal Insurance Exchange (BRIE) will focus on offering financial capacity for the company’s homeowners insurance segment.
The funding is expected to be completed in the second quarter of 2025, subject to customary closing conditions and regulatory approvals.
BRIE’s creation is part of Baldwin’s strategy to transition its “builder-sourced” homeowners insurance business to a new managing general agency (MGA) model.
An affiliate of Baldwin will serve as the attorney-in-fact for BRIE, and Baldwin has stated that it will not consolidate the financial results of BRIE or the attorney-in-fact.
Insurance Advisory Partners was the exclusive financial advisor to Baldwin and the placement agent for the surplus debentures.
Troutman Pepper Locke provided legal counsel to Baldwin, while Morgan, Lewis & Bockius advised Gallatin Point Capital in the transaction.
Baldwin Group CEO Trevor Baldwin said: “We are extremely excited about the signing of the note purchase agreement with Gallatin Point, a leading financial services investor, which will enable the successful launch of BRIE with $110m in committed surplus notes.
“Launching BRIE represents a meaningful milestone in our continued journey to vertically integrate across the value chain and bring innovative, third-party risk capital solutions to market in support of more efficient risk transfer outcomes for our clients.”
Gallatin Point managing partner Matthew Botein stated: “We are thrilled to be partnering with Baldwin on the launch of BRIE. Baldwin’s growth over the past decade has been remarkable, and we are excited to be able to support them through our capital investment as they continue to create innovative insurance solutions for their clients and further grow their builder-sourced homeowners book of business.”
Earlier this year, Clearcover introduced the Clearcover Inter-Insurance Exchange to extend its services into the non-standard auto insurance market.
Porch Group also established the Porch Insurance Reciprocal Exchange.
