Core Specialty Insurance Holdings has acquired American National Group’s Specialty Markets Group (SMG), marking the creation of Core Specialty’s financial services division.
The transaction, financial terms of which were not disclosed, will see Mark Walker stepping into the role of financial services division president. Part of the bond, credit & guarantee operations, the new segment will operate as the 16th specialty business unit at Core Specialty.
Known for its expertise in the US credit insurance market, SMG brings more than six decades of industry experience to Core Specialty, having worked with banks, auto dealerships, finance companies, and credit unions over the years. In 2023, it produced $388 million of direct premiums written.
“Core Specialty has agreed to (1) pay American National a renewal rights premium for the SMG business renewed over a 12-month period; and (2) assume the unearned premium reserve associated with the SMG business,” Core Specialty announced.
“Under a prospective quota share reinsurance agreement, American National will cede, and Core Specialty will reinsure, 100% of the SMG business (net of applicable reinsurance) commencing January 1, 2024, until such time that necessary Core Specialty product filings have been approved and Core Specialty is writing SMG new and renewal business.”
Until then, American National will continue to issue new and renewal policies for which it will receive a fronting fee.
Additionally, it was noted that Core Specialty is not acquiring any insurance company entities as part of the transfer. American National will also be retaining loss reserves associated with SMG. The workforce currently servicing SMG, meanwhile, will become Core Specialty employees.
Core Specialty founder, president, and chief executive Jeff Consolino expressed enthusiasm about the acquisition, which follows last year’s swoop for American National’s medical stop-loss business.
“The Specialty Markets Group business is a line of business we know well, and we are excited to add this product line to our bond, credit & guarantee subsegment,” Consolino said.
“The products offered by the Specialty Markets Group have shown strong profitability over time, and the transfer of this business will add further diversification to our company. I would like to welcome our new Specialty Markets Group colleagues to Core Specialty.”
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