Core Specialty and its subsidiaries have entered into a series of transactions with Conifer Holdings to acquire Conifer’s Security & Alarm Business.
Core Specialty explained that the Security & Alarm Business provides general liability, excess/umbrella, and selected other coverages to the niche Security Guards, Alarm Contractors, Private Investigators, and Trade Contractors markets.
The business produced $48 million of gross premiums written in 2022.
As part of the transaction, Core Specialty has agreed to pay Conifer $2.5 million in cash for the exclusive right to underwrite the Security & Alarm Business through October 2025, and the renewal rights to such business thereafter.
Core Specialty will also assume the unearned premium reserve associated with the Security & Alarm Business, and purchase $5 million of Conifer’s 9.75% Senior Unsecured Notes due 2028 which are “being offered on a reasonable best efforts basis pursuant to a Conifer registration statement on Form S-4 and Form S-1, as amended, including a prospectus, which was filed with the Securities and Exchange Commission and was declared effective by the SEC.”
Policies for the Security & Alarm Business will be issued by Core Specialty insurance subsidiaries, which it said are rated A- XII (Excellent) by AM Best, effective with the transaction closing.
In a written statement, Core Specialty said it will “not acquire any insurance company entities as part of the transaction and the transaction does not include loss reserves associated with the Security & Alarm Business which will be retained by Conifer.
“Core Specialty and Conifer will work together to ensure all policyholders continue to receive industry-leading products and services, and to align the operations in the best interests of customers, agents, brokers, and employees. The claims staff currently servicing the Security & Alarm Business have become employees of Core Specialty as part of the transaction.”
Jeff Consolino, Core Specialty’s Founder, President, and Chief Executive Officer said, “With our ratings, financial strength and capital resources, the Security & Alarm Business is well aligned for continued profitable growth. I would like to welcome our new colleagues to Core Specialty.”
The firm expects the transaction to be accretive to its earnings per share and return on equity in 2024.