ST. PETERSBURG, Fla.–(BUSINESS WIRE)–
United Insurance coverage Holdings Corp. (Nasdaq: UIHC), a data-driven private and industrial strains insurance coverage holding firm with investments in rising InsurTech improvements (“UPC Insurance coverage”) and HCI Group, Inc. (NYSE: HCI), an InsurTech firm with operations in insurance coverage, software program growth and actual property (“HCI”), have reached an settlement in precept to switch UPC Insurance coverage’s private strains enterprise within the three Southeast states of Georgia, North Carolina and South Carolina to HCI. The transaction will allow UPC Insurance coverage to reallocate capital from its private strains portfolio to its quick rising industrial specialty property portfolio, which is underwritten by American Coastal Insurance coverage Firm.
Beneath the phrases of the transaction, HCI will present 85% quota share reinsurance on the in-force, new and renewal insurance policies of United Property and Casualty Insurance coverage Firm (“UPC”) in Georgia, North Carolina and South Carolina for the interval December 31, 2021 via Might 31, 2022. UPC’s 15% quota share reinsurance with one other reinsurer is predicted to stay in place throughout this time interval. Beneath the quota share association, HCI can pay to UPC a provisional ceding fee of 25% of premium earned through the time period of the contract that might enhance as much as 32% relying on the direct loss ratio outcomes for the reinsured enterprise. The estimated ceded earned premium for the quota share interval December 31, 2021 via Might 31, 2022 is $33.3 million (85% of $39.2 million). This could lead to estimated web ceding commissions to UPC between $8.3 million and $10.6 million. HCI will even pay UPC a disaster allowance equal to 9% of premium earned estimated at $3.0 million for the quota share interval December 31, 2021 via Might 31, 2022.
Additionally as a part of the transaction, UPC will grant HCI renewal rights in respect of its private strains enterprise in Georgia, North Carolina and South Carolina. Consideration for renewal rights contains an up-front money cost from HCI to UPC of $3.8 million which can be adjusted primarily based on the quantity of premium transitioned to HCI, topic to a most of $6 million. In reference to the transaction, UPC Insurance coverage will agree to not compete with HCI for the issuance of private strains householders enterprise within the three Southeast states till July 1, 2025.
The transaction is topic to negotiation of definitive agreements and customary closing situations, together with receipt of all relevant regulatory approvals.
Debevoise & Plimpton LLP is appearing as authorized advisor to UIHC.
About UPC Insurance coverage
Based in 1999, UPC Insurance coverage is an insurance coverage holding firm that sources, writes and companies private and industrial residential property and casualty insurance coverage insurance policies utilizing a gaggle of wholly owned insurance coverage subsidiaries and one majority owned insurance coverage subsidiary via a wide range of distribution channels. The Firm at present writes insurance policies in Florida, Georgia, Louisiana, New York, North Carolina, South Carolina and Texas. The Firm additionally writes insurance policies in Connecticut, Massachusetts, and New Jersey, the place renewal rights have been offered and all premiums and losses are ceded. From its headquarters in St. Petersburg, UPC Insurance coverage’s crew of devoted professionals manages a totally built-in insurance coverage firm, together with gross sales, underwriting, customer support and claims.
Statements made on this press launch could also be “forward-looking statements.” These statements are made topic to the safe-harbor provisions of the Personal Securities Litigation Reform Act of 1995. These forward-looking statements don’t relate strictly to historic or present information and could also be recognized by their use of phrases akin to “could,” “will,” “count on,” “endeavor,” “challenge,
plan,” “anticipate,” “intend,” “might,” “would,” “estimate” or “proceed” or the destructive variations thereof or comparable terminology, and embrace statements relating to signing definitive documentation for the transaction, receipt of regulatory approvals and effectiveness of the quota share reinsurance settlement. We consider these statements are primarily based on affordable estimates, assumptions and plans. Nevertheless, if the estimates, assumptions or plans underlying the forward-looking statements show inaccurate or if different dangers or uncertainties come up, precise outcomes might differ materially from these communicated in these forward-looking statements. Elements that might trigger precise outcomes to vary materially from these expressed in, or implied by, the forward-looking statements could also be present in our filings with the U.S. Securities and Trade Fee, together with the “Threat Elements” part in our most up-to-date Annual Report on Type 10-Ok and subsequent Quarterly Stories on Type 10-Q. Ahead-looking statements communicate solely as of the date on which they’re made, and, besides as required by relevant regulation, we undertake no obligation to replace or revise any forward-looking assertion.
United Insurance coverage Holdings Corp.
Deputy Chief Monetary Officer
(727) 895-7737 / firstname.lastname@example.org
The Fairness Group
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Supply: United Insurance coverage Holdings Corp.