US-based commercial auto insurer Atlas Financial Holdings has announced the previously disclosed sale of further legacy assets, American Service Insurance Company and American Country Insurance Company, to ride-sharing insurance provider Buckle has concluded successfully with the necessary regulatory and court approvals.
The transaction closed on May 25th with buckle paying $3 million to the statutory liquidator, representing a portion of the purchase price.
Last year Buckle completed the purchase of Atlas’ subsidiary Gateway Insurance Company, following Atlas’ decision to move towards an MGA model.
As previously announced, Atlas’ strategic focus is to alternative markets through the company’s wholly owned managing general agency (MGA), Anchor Group Management, (AGMI), to leverage the team, distribution systems and other resources aligned under this business unit.
Upon closing, affiliates of Buckle and AGMI intend to expand their existing general agency agreement relating to the transition of qualifying taxi, livery and limousine insurance business.
Scott D. Wollney, President & CEO of Atlas, commented: “We are very pleased to have concluded this transaction regarding the sale of legacy insurance assets to Buckle. We expect it will provide incremental positive benefits to both companies, our employees, customers, investors, and other stakeholders.
“As we continue pursuing our specialty MGA strategy, expanding the scope of our risk taking partner relationships will increase our flexibility with respect to product offerings and addressable markets. Our emphasis continues to be focused on generating EBITDA at the MGA level, while endeavouring to reduce risk and capital requirements related to traditional primary insurance company operations.
“While it remains very difficult to forecast expected business volumes, revenue, and other key metrics due to COVID-19 related economic uncertainty, we are encouraged to see leading indicators of recovery in our customers’ business segments.
“This transaction brings us one step closer to finalising our strategic transition and adds additional resources we believe will ensure we are best positioned to capture business in the face of an expected recovery.”
Sharon Fernandez, Head of Insurance at Buckle said: “Buckle recognises that MGAs represent a valuable aspect of the risk transfer supply chain. Adding American Country and American Service Insurance Companies to our carrier infrastructure is expected to provide additional flexibility in connection with the ‘digital fronting’ aspect of our business model.
“We are excited to continue working together with AGMI and our reinsurance partners to expand our infrastructure in anticipation of growth in the important transportation markets we collectively serve.”