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Avatar to acquire Centauri’s coastal underwriting units

16th January 2020 - Author: Luke Gallin

Avatar Partners LP, the parent of Florida’s Avatar Property & Casualty Insurance Company, is set to acquire Centauri Specialty Insurance Company and its Louisiana-based subsidiary, Centauri National Insurance Company.

handshakeCentauri Specialty Insurance Company is part of Centauri Specialty Insurance Holdings, Inc., a Delaware-based holding company.

The firm was established in 2006 in Hawaii and has since expanded to become one of the largest carriers of hurricane insurance in the state. Furthermore, the firm currently underwrites business in eight other states and plans to grow in the future.

In light of the acquisition, Demotech has announced that the Financial Stability Rating (FSR) of A, Exceptional, assigned to Centauri Specialty Insurance Company is being sustained.

Demotech’s President and co-founder, Joseph Petrelli, commented: “We have been frequently briefed by Centauri and Avatar personnel throughout the process and assured that both parties desire to effect a transaction that will enhance the 2019 year-end annual statement of Centauri Specialty Insurance Company.

“It appears that consumer, claimant, agency, and reinsurer relationships should be enhanced by the introduction of Avatar’s ownership, management, expertise, philosophy, and financial resources.”

At the same time, Demotech, a financial analysis firm with a specialist focus in evaluating the financial stability of regional and specialty insurers, has also sustained the FSR of A, Exceptional, assigned to Centauri National Insurance Company, based upon its pending acquisition by Avatar Partners.

Centauri National Insurance Company is a Louisiana domiciled subsidiary of Centauri Specialty and was formed in 2017, offering a range of residential solutions in the region.

“We have been frequently briefed by Centauri and Avatar personnel throughout the process and assured that both parties desire to effect a transaction that will enhance the 2019 year-end annual statement of Centauri National Insurance Company.

“It appears that consumer, claimant, agency, and reinsurer relationships should be enhanced by the introduction of Avatar’s ownership, management, expertise, philosophy, and financial resources,” said Petrelli.

Demotech warned recently that it is anticipating downgrades for several insurance carriers in Florida, driven by a number of state-specific pressures on financial performance.

At this time, analysts noted that some carriers in the region will likely seek a sale to avoid being downgraded, while others might well ask for permission to voluntarily run-off outstanding claims.

This announcement is the latest in a number of Florida deals, which includes the acquisition of Anchor Specialty Insurance Company by Weston Insurance Holdings Corporation, and the acquisition of the insurance policies of Anchor Property & Casualty Insurance Company by HCI Group’s Homeowners Choice Property & Casualty Insurance Company.

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