US-based property and casualty insurer Hallmark Financial Services has offloaded its excess and surplus (E&S) lines operations to Core Specialty Insurance Holdings, for $40m in cash.
The deal consideration also includes $19.9m for acquisition costs related to certain net unearned premium reserves.
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Hallmark sold nine business units within its Specialty Commercial business segment, along with certain related assets and liabilities.
Core Specialty expects the deal to add to its earnings per share and return on equity next year.
As part of the deal, around 200 employees supporting the E&S lines operations joined Core Specialty.
The deal covers Hallmark’s agency subsidiary Heath XS, which undertakes business as Hallmark E&S, and all data, intellectual property, agency relationships, lease arrangements and employees associated with the purchased E&S businesses.
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By GlobalDataHowever, it excludes insurance company entities and loss reserves tied to the acquired E&S operations.
The deal excludes Hallmark’s standard commercial business segment, personal business segment, aerospace & programs business unit, the exited binding primary auto business, or any business produced by third-party programme managers.
Core Specialty founder, president and CEO Jeff Consolino said: “Core Specialty’s vision is to become the leading specialty insurer and the Hallmark E&S acquisition continues our very strong progress in our mission.
“Core Specialty has the capital to take on risk, the underwriting talent in place, a proven and decisive leadership team and a track record of making things happen fast.
“Collectively and in each of our specialist niche business units, we intend to operate with strong entrepreneurial spirit and drive, speed, agility, and empowered decision-making. Hallmark has done an admirable job of assembling and nurturing this profitable business which strongly complements Core Specialty’s business.”
