American Coastal Insurance Corporation Announces the Sale of Interboro Insurance Company to Forza Insurance Holdings, LLC

Rhea-AI Summary

American Coastal Insurance (ACIC) announced the sale of Interboro Insurance Company to Forza Insurance Holdings, The transaction marks the completion of ACIC's personal lines portfolio run-off, focusing on the commercial specialty property portfolio. Interboro will now be managed by Forza and SageSure under new service agreements, aiming to expand Forza's property insurance portfolio.

Positive

• The sale of Interboro Insurance Company will allow American Coastal Insurance to focus on its fast-growing commercial specialty property portfolio, potentially leading to increased profitability.

• The acquisition of Interboro by Forza Insurance Holdings, , underlines a strategic move to further diversify Forza's portfolio of property insurance companies, enhancing its market position and potential for growth.

• The partnership between Forza, SageSure, and Interboro is expected to bring together experienced teams that can drive Interboro to new heights, providing opportunities for development and expansion within the insurance industry.

Negative

• The sale of Interboro Insurance Company may lead to a short-term disruption as the transition of ownership and management takes place, potentially impacting employees and policyholders during the process.

• Although the sale of Interboro marks a strategic shift for American Coastal Insurance , there may be unforeseen challenges in reallocating resources and restructuring the company's operations to focus solely on the commercial specialty property portfolio.

Insights

Financial Analyst

In the insurance sector, strategic acquisitions can reshape a company's focus and growth trajectory. The sale of Interboro Insurance Company to Forza Insurance Holdings, LLC, indicates a significant strategic maneuver by American Coastal Insurance Corporation. By divesting Interboro, ACIC can allocate resources and capital more efficiently towards its burgeoning commercial specialty property portfolio. This move seems to streamline ACIC's business model, potentially bolstering their market agility and financial health. For Forza, acquiring Interboro diversifies their property insurance offerings geographically into New York, a market known for stringent regulatory hurdles but also lucrative opportunities due to the dense population and high property value. The operational aspect of the deal, involving service agreements with SageSure, suggests a continuity plan for Interboro's policy administration and claims management, which could facilitate a smoother transition and ensure stability for policyholders. From an investor perspective, tracking ACIC's stock performance post-transaction will be critical to assess the realignment's effectiveness. The deal's success hinges on regulatory approval and investors should monitor any developments from the New York Department of Financial Services as they could affect the closing timeline and eventual financial impact.

Market Research Analyst

In examining this acquisition within the broader market context, we should consider the consolidation trend prevalent in the insurance industry. This trend is driven by the need for economies of scale, product diversification and enhanced customer base. Forza's strategy to incorporate Interboro into its roster, complementing its existing Gulf and Southeast-focused entities, suggests an ambition to solidify its market presence in different geographic locales. Moreover, the partnership with SageSure, a company touted for its underwriting and claims expertise, could be indicative of Forza's commitment to operational excellence. This acquisition aligns with the industry's focus on resilient portfolios capable of withstanding market pressures, such as natural disasters or economic fluctuations. An investor evaluating this transaction should consider how the collective expertise of the acquired and existing teams could translate into higher market penetration and potentially improved underwriting results for Forza. While the specifics of the financial transaction were not disclosed, this tie-up is likely to have ripple effects across the competitive landscape, possibly prompting peer companies to evaluate their strategic positions.

ST. PETERSBURG, Fla.--(BUSINESS WIRE)-- American Coastal Insurance Corporation (Nasdaq Ticker: ACIC) (“the Company”, “American Coastal” or “ACIC”), the insurance holding company of Interboro Insurance Company (“Interboro”), a New York domiciled insurance company, announced today that it has signed definitive agreements with Forza Insurance Holdings, LLC (“Forza”) in which ACIC will sell and Forza will acquire 100% of the issued and outstanding stock of Interboro. Closing is subject to the approval of the New York Department of Financial Services. The transaction completes the run-off of ACIC’s personal lines portfolio and allows ACIC to focus on its fast-growing commercial specialty property portfolio.

Concurrently, Interboro and SageSure entered into a Program Administrator Agreement and a Claims Services Agreement on May 9, 2024. Under the terms of these service agreements, SageSure will provide policy administration, underwriting and claims administration services on behalf of Interboro.

“Interboro is a strong strategic fit for Forza and SageSure. We are incredibly pleased that we have found the right purchaser and program administrator to continue Interboro’s 100+ year journey. Peter N. Resnick, President of Interboro, and his talented team will complement the teams from Forza and SageSure and will be able to take Interboro to new heights,” said Brad Martz, President of American Coastal.

Once closed, the acquisition of Interboro will further diversify Forza’s portfolio of property insurance companies, which currently includes SureChoice Underwriters Reciprocal Exchange (“SURE”) and Elevate Reciprocal Exchange (“Elevate”), both with a geographic focus in the Gulf and Southeast.

“Interboro is a longstanding, reliable writer of homeowners business in New York, a natural addition to Forza’s holdings,” said Travis Lewis, Executive Chairman of Forza. “We look forward to welcoming new associates from Interboro and to developing and growing our resilient portfolio that continues to expand our strategic partnership with SageSure.”

“SageSure is proud to bring our market-leading underwriting, service and claims experience to Interboro policyholders and producers,” said Terrence McLean, President and CEO of SageSure. “We are excited to partner with Interboro and grow our Forza partnership.”

Raymond James & Associates acted as exclusive financial advisor to American Coastal. The law firm of Debevoise & Plimpton LLP served as legal counsel to American Coastal. Howden Capital Markets & Advisory served as exclusive financial advisor to Forza. ACCEL Law Group served as legal counsel to Forza.

About American Coastal Insurance Corporation

American Coastal Insurance Corporation (amcoastal.com) is the holding company of the insurance carrier, American Coastal Insurance Company, which was founded in 2007 for the purpose of insuring Condominium and Homeowner Association properties, and apartments in the state of Florida. American Coastal Insurance Company has an exclusive partnership for distribution of Condominium Association properties in the state of Florida with AmRisc Group (amriscgroup.com), one of the largest Managing General Agents in the country specializing in hurricane-exposed properties. American Coastal Insurance Company has earned a Financial Stability Rating of ‘A, Exceptional’ from Demotech. American Coastal Insurance Corporation is rated BB+ with a Stable Outlook by Kroll Bond Rating Agency.

About Forza Insurance Holdings LLC

Founded in 2021, Forza oversees the strategic growth of insurance brands designed to protect coastal property and offer reliable capacity for distribution partners. Led by a team with decades of experience building and managing profitable insurance entities, Forza sources capital for strategic investments to accelerate growth for its portfolio of insurance companies and to generate attractive returns for investors. Its current holdings include the Texas-domiciled reciprocal insurance exchanges SURE and Elevate. To learn more, visit forzains.com.

About Interboro Insurance Company

Founded in 1914, Interboro is the oldest insurance company domiciled on Long Island, New York. Interboro writes homeowners insurance in New York through a network of over 450 independent brokers. Interboro is also licensed to write business in South Carolina, Louisiana, Alabama, and Washington, D.C. Interboro is dedicated to ensuring financial protection for its policyholders by providing quality products and exceptional service through strong relationships with its brokers.

About SageSure

SageSure is the managing general agent specializing in coastal residential and commercial property insurance. SageSure offers more than 50 competitively priced insurance products in 14 coastal states on behalf of its carrier partners, serves more than 550,000 policyholders, and has more than $1.6 billion of inforce premium. Since its launch in 2009, SageSure has been pioneering property insurance through its market-leading online quoting and binding platform and its sophisticated risk modeling and scoring technology. For more information, visit sagesure.com.

Forward-Looking Statements

Statements made in this press release may be “forward-looking statements.” These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words such as “may,” “will,” “expect,” "endeavor," "project," “believe,” "plan," “anticipate,” “intend,” “could,” “would,” “estimate” or “continue” or the negative variations thereof or comparable terminology, and include statements regarding signing definitive documentation for the transaction, receipt of regulatory approvals and effectiveness of the quota share reinsurance agreement. We believe these statements are based on reasonable estimates, assumptions, and plans. However, if the estimates, assumptions, or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements may be found in our filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” section in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made, and, except as required by applicable law, we undertake no obligation to update or revise any forward-looking statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240509157208/en/

Alexander Baty

Vice President, Finance & Investor Relations, American Coastal Insurance Corporation

investorrelations@amcoastal.com

(727) 425-8076

Karin Daly

Investor Relations, Vice President, The Equity Group

kdaly@equityny.com

(212) 836-9623

Source: American Coastal Insurance Corporation

FAQ

What did American Coastal Insurance announce?

American Coastal Insurance announced the sale of Interboro Insurance Company to Forza Insurance Holdings,

What is the Nasdaq Ticker symbol for American Coastal Insurance ?

The Nasdaq Ticker symbol for American Coastal Insurance is ACIC.

Who will acquire 100% of the issued and outstanding stock of Interboro?

Forza Insurance Holdings, will acquire 100% of the issued and outstanding stock of Interboro.

When was the Program Administrator Agreement and Claims Services Agreement between Interboro and SageSure signed?

The Program Administrator Agreement and Claims Services Agreement between Interboro and SageSure were signed on May 9, 2024.

Who acted as the exclusive financial advisor to American Coastal in the sale of Interboro?

Raymond James & Associates acted as the exclusive financial advisor to American Coastal.