December 3, 2022



United Assets & Casualty Says It Is Exploring Possible Sale or Merger

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United Insurance policy Holdings Corp., father or mom company of regarded as considered one of Florida’s greatest assets insurers – and one that has observed heavy losses inside the ultimate two years – offered that its board of directors is now exploring quite a lot of possible choices to boost capital, at the side of the sale of the company or merger with one different.

Other possible choices embody “subsidiary divestiture, formation of a brand spanking new Florida-domiciled reciprocal alternate, along with the sale of equity, surplus notes or other financing or strategic transactions,” UPC Insurance policy said in a knowledge release posted Wednesday.

The company moreover said it has retained Insurance policy Advisory Partners, an investment banking and consulting company as its financial consultant, and Debevoise & Plimpton, an international law company, as its licensed recommend to assist inside the overview process.

The announcements fueled speculation that the insurer, which until simply in recent years held more than 180,000 insurance coverage insurance policies in Florida, is in worse financial shape than expected, without reference to vital steps that company leaders have taken inside the ultimate twelve months. A sale or merger may put across masses of hundreds of {bucks} in fresh capital, just like the restructuring measures followed via Florida-based FedNat Insurance policy Co. in May.

FedNat, after large hurricane losses in Louisiana, agreed to a restructuring consent order with Florida regulators, moving masses of insurance coverage insurance policies to a subsidiary, Monarch National Insurance policy. Hale Partnership Capital Management then took a majority stake in Monarch and invested $15 million into it.

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The publicly traded UPC reported a $33 million loss for the principle quarter of 2022, at the heels of $60 million in adverse internet profits for 2021 and $95 million in losses for the twelve months previous than, thank you in part to huge local weather hurt in Louisiana. UPC’s combined ratio crowned 120 ultimate twelve months, down slightly from the sooner twelve months, on the other hand considerably better than in 2017.

Dan Peed, chairman of UPC (UPC)

Throughout the ultimate 9 months, the St. Petersburg-based insurer has undertaken some primary efforts to stem the losses. In December, UPC agreed to advertise its personal lines in Georgia, North Carolina and South Carolina to HCI Staff Inc. In January, UPC stopped writing new homeowner endeavor in Florida while inquiring for a rate give a boost to for some forms of insurance coverage insurance policies.

In April, the company said it was once merging two subsidiaries, Adventure Insurance policy Co. and American Coastal, and would distribute a large number of Adventure’s capital to other subsidiaries.

In June, Wright National Flood Insurance policy said it must take over UPC’s flood insurance policy guide of endeavor.

UPC company officials couldn’t be reached for statement Wednesday night time and Thursday morning. The company’s knowledge release notes that it was once founded in 1999 and continues to write down some insurance coverage insurance policies in Florida, Louisiana, New York and Texas. It moreover wrote in Georgia, South Carolina, and North Carolina, on the other hand renewal rights there were purchased and all premiums and losses are ceded, the company said.

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The Thursday knowledge release advised that further details a couple of possible sale is probably not out there anytime temporarily.

“There might be no assurance that this process will outcome inside the company pursuing a decided on transaction and the company doesn’t intend to show further traits except for and until it determines that further disclosure is appropriate or mandatory,” UPC said.

United Insurance policy Holdings stock was once selling for $1.37 a proportion Thursday morning, up slightly from the day previous than, on the other hand considerably lower than a twelve months previously.

Mergers & Acquisitions
Assets Casualty