Specialty property and casualty (P&C) insurers Core Specialty and Lancer Insurance Group have announced plans to combine their companies in a stock and cash deal.
The transaction, which is to be structured as a merger, will see Lancer operate as a separately managed Division of Core Specialty, retaining the Lancer brand and management team.
Lancer CEO Dave Delaney will join the Core Specialty Board, and Lancer shareholders will receive a combination of Core Specialty common shares, preferred shares and cash.
The combined entity will continue to be led by Jeff Consolino as President and CEO and by Ed Noonan as Executive Chairman, and will have approximately 550 total employees and over $1 billion in equity capital.
Meanwhile, Matthew Jenkins, Lancer’s President & Chief Operating Officer, will serve as President of Core Specialty’s Lancer Division after the closing.
The merger was unanimously approved by both companies’ Boards of Directors and is expected to be completed during the third quarter of 2021, subject to customary regulatory approvals.
It comes after the companies previously partnered in January 2021 to launch a new excess transportation program.
“Core Specialty’s vision is to become the leading specialty insurer and the Lancer merger continues our very strong progress in our mission,” said Consolino. “Core Specialty has the capital to take on risk, the underwriting talent in place, a proven and decisive leadership team and a track record of making things happen fast. Collectively and in each of our specialist niche business units, we intend to operate with strong entrepreneurial spirit and drive, speed, agility, and empowered decision-making.
He continued: “Lancer is a leader in the specialty transportation market with a long track record and a senior management team we know and admire. Lancer will operate as Core Specialty’s ninth specialty P&C business unit. Since the June 30, 2020 agreement by Core Specialty to recapitalize StarStone U.S., we have grown from four business units through forming a new Excess & Surplus Property Division, establishing a Marine and Energy Division from the StarStone London managed business, separating and hiring new leadership for our Errors and Omissions Professional Liability and D&O Management Professional Liability Divisions and initiating an Agriculture Division.”
Delaney also commented: “All of us at Lancer are excited to be joining forces with Core Specialty. Core Specialty’s management team is exceptional and our friendship with Jeff Consolino, Ed Noonan and members of Core Specialty’s Board goes back a very long way.”
“I have no doubt Lancer and Core Specialty’s combined operating and financial resources will create tremendous growth opportunities for our shareholders, employees, policyholders and distribution partners.”
And finally, Noonan stated: “I have known Dave Delaney for over 30 years. He is an excellent specialty P&C insurance operator and I am excited that he will be joining the Core Specialty Board. We have assembled a Board for Core Specialty comprised of company founders and business builders which we believe is second to none and Dave’s talents will add meaningfully to our Board.”
“We are also pleased and honored that after decades of building Lancer as an independent, family-controlled enterprise, Dave and his co-shareholders have the confidence in Core Specialty’s management, business plan and investors to exchange their Lancer equity for the opportunity to join their future prospects with ours.”
