US-based commercial auto insurer, Atlas Financial Holdings has announced that the renewal rights to its agreement to sell its Large Paratransit Accounts to National Interstate Insurance Company (NATL), which was previously announced in July 2020, has been finalised.
Following the agreement, Atlas and NATL will work together to transition the handling of Large Paratransit Accounts to NATL during the next year. The Company received $2.9 million as consideration from NATL for this transaction.
Under the previously announced expanded agreement, Atlas’ MGA subsidiary, Anchor Group Management will continue to manage owner operators and fleets with seven or less vehicles until at least August 2021.
If the Small Paratransit Account program is not extended further, NATL continues to retain the option to purchase renewal rights on this segment at the expiration of the agreement period.
Under the terms of the agreements, the Company will not compete with NATL for Large Paratransit Accounts for a period of three years following the Large Paratransit Account renewal rights transaction.
Scott D. Wollney, Atlas’ President & CEO said: “We are very pleased with this transaction as well as our continuing relationship with National Interstate, which we believe demonstrates the value that our MGA focused strategy delivers to our business partners, shareholders and other stakeholders.
“Our team has been working very effectively with the National Interstate team and is extremely pleased to be able to continue offering specialised insurance programs to smaller accounts on a go-forward basis.
“National Interstate continues to be an extremely valuable partner and we are proud to be working together to support paratransit operators providing essential rides across the U.S.
“Atlas and AGMI’s focus has centred around owner operators and smaller accounts and we believe the ongoing relationship confirms the core competency we’ve developed in this unique area.
“It is consistent with our emphasis being placed on generating EBITDA at the MGA level while endeavouring to reduce risk and capital requirements related to traditional primary insurance company operations. We will continue to pursue opportunities to leverage this expertise in other areas of specialty commercial auto as a managing agent as well.”