Hagerty Insurance Holdings Inc. has agreed to an $18.4 million deal to acquire all outstanding capital stock of Consolidated National Insurance Co. from Everspan Insurance Co.
In a U.S. Securities and Exchange Commission filing, the automobile specialist said it will continue “high rates of premium growth and retention of underwriting profits” with Consolidated National as its new carrier platform. Hagerty plans to widen its space to attract more classic and enthusiast vehicle owners, particularly the post-1980 market, it said.
In a presentation on Hagerty’s website, the company said it has penetrated 13.3% of the 11.2-million-vehicle market of pre-1981 classics but just 1.7% of the much larger — 35.2 million vehicle — post-1980 collectibles market.
A direct underwriting carrier offers better underwriting profit control, Hagerty said. And it should improve consumer value by removing frictional costs.
The company said it already has decades of claims data covering 40,000 distinct makes and models and can effectively price for low loss ratios.
The transaction is expected to close in the second quarter. Hagerty said the purchase price breaks down to $10.4 million for approved state licenses and $8 million for anticipated capital and surplus.
Hagerty Classic Marine Insurance co-founder Louise Hagerty recently died. She was 88. She founded the business that laid the groundwork for what is now a public company with her husband, Frank, in 1984.
AM Best has commented the Credit Ratings of Hagerty Re Ltd. remain unchanged following the announcement.
Hagerty Reinsurance Ltd. currently has a Best’s financial Strength Rating of A- (Excellent).