Core Specialty Insurance Holdings, Inc. and its subsidiaries said Oct. 7 that it has completed the acquisition of Hallmark Financial Services, Inc.’s excess & surplus lines operations for approximately $40 million in cash.
The business acquired from Hallmark represents that portion of Hallmark’s Specialty Commercial Segment that is distributed through the wholesale insurance brokerage channel. Hallmark E&S produced $436 million of wholesale distributed excess & surplus lines business in the 12-month period ended June 30, 2022. The combined business would be among the 20 largest E&S groups based on 2021 data.
Core Specialty will not acquire any insurance company entities as part of the transaction and the transaction excludes loss reserves associated with the Hallmark E&S business which will be retained by Hallmark.
Related: Hallmark Financial Cancels Plans for Specialty Insurance Spinoff and IPO
Management and the approximately 176 employees of the Hallmark E&S business, based in Dallas, Atlanta and Jersey City, New Jersey, will transition to Core Specialty. Gerald A. Dupre, Jr., currently president and chief underwriting officer of Hallmark’s specialty commercial segment, will join Core Specialty as part of the transaction in a leadership role within the combined excess & surplus lines business.
Core Specialty expects the transaction to be accretive to its earnings per share and return on equity in 2023. Core Specialty has drawn $130 million under its Unsecured Revolving Credit Facility to support future business to be underwritten by Hallmark E&S and to pay the $40 million cash purchase price.
“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,” said Jeff Consolino, Core Specialty’s founder, president and CEO. “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.”
SOURCE: Core Specialty
Topics Excess Surplus
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