Florida’s largest private insurer has raised $19 million through a privately negotiated stock deal with an investment firm that specializes in natural catastrophe reinsurance and weather risk.
Universal Holdings Inc announced the deal that called for the sale of one million shares of common stock to Ananka Catastrophic Investments Inc, an affiliate of Nephila Capital Ltd.
According to Securities and Exchange Commission documents, the terms of the deal called for Ananka to purchase the stock at $19 per share, which was higher than the $18.31 per share Universal’s stock was selling at the time of the deal. Universal’s stock is currently listed on the New York Stock Exchange at around $20 per share.
Universal Holdings President Sean Downes said the deal would immediately increase its common stock value by seven percent per share. Downes said that among other things, the insurers will use the money would be used to grow and expand.
“The transaction will allow the company to use the proceeds to accelerate its organic growth strategy though the combination of continued geographic expansion outside Florida and further quota share reduction,” said Downes in a statement.
Downes said that the reduction in quota share reinsurance would allow the insurer to retain $230 million from its existing book of business.
The Fort Lauderdale, Florida-based Universal Insurance Holdings offers private homeowners insurance through its wholly-owned subsidiary Universal Property & Casualty Insurance Co., which is Florida’s largest private insurer.
According to the state Office of Insurance Regulation, Universal Property had 500,000 policies in force as of June 30, 2014.
By comparison, at the same time the state-backed Citizens Property Insurance Corp. had roughly 933,000 policies-in-force, a number that has since fallen to 727,000 as private insurers including Universal Property have expanded their books of business.
Universal Property is also licensed in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts, Maryland and Delaware. In October, the insurer also was licensed in Indiana.
In addition to Universal Property, the holding company also operates American Platinum Property and Casualty Insurance Co. American Platinum provides homeowners insurance to Florida residents with homes valued in excess of $1 million.
According to SEC documents, 98 percent of Universal Holdings policies-in-force include wind coverage, with 28 percent of those policies located in Miami-Dade, Broward and Palm Beach counties.
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