Mid-market private equity firm Genstar Capital Management LLC has partnered with an insurance industry veteran to create a new platform company, Palomar Insurance Holdings, which will initially serve as a provider of commercial and residential earthquake insurance.
Concurrent with the investment, Palomar acquired an admitted insurance company from a national insurer licensed to underwrite business in seven states and has changed the name to Palomar Specialty Insurance Co.
Genstar didn’t make known what company was acquired.
However, according to public records from Oregon, Cottage Insurance Holdings Inc. in late 2013 filed a statement regarding the acquisition of Northwestern Pacific Indemnity Co., a wholly owned subsidiary of Pacific Indemnity Co., a Wisconsin corporation controlled by the Chubb Corp.
Cottage was formed in 2013 and is funded by Genstar in order to acquire and hold the stock of Northwestern, according to the records.
In February, Reuters reported that Fitch Ratings withdrew Northwestern’s ‘AA’ Insurer Financial Strength due to reorganization because it was no longer affiliated Chubb due to a private sale.
San Francisco-based Genstar, formerly the private equity firm behind Confie Seguros until Confie was acquired by Boston-based private equity firm ABRY Partners in 2012, focuses on investments in selected segments of the financial services, software, healthcare, and industrial technology industries.
Genstar said it has partnered with David M. Armstrong to establish Palomar Insurance, which was funded with $75 million of equity capital from Genstar and the management team.
Palomar has received a Financial Strength Rating of A- (Excellent) and an Issuer Credit Rating of “a-” from A.M. Best Company. A.M. Best assigned a stable outlook to both ratings.