Atlas Financial Holdings Announces Sale of Large Paratransit Account Renewal Rights to National Interstate Insurance Company; Reiterates Extension of Small Account Underwriting Agreement
CHICAGO–(BUSINESS WIRE)–Atlas Financial Holdings, Inc. (OTC: AFHIF) (“Atlas” or the “Company”) today announced that further to the extension and expansion of its agreement with National Interstate Insurance Company (“NATL”), which was previously announced in July 2020, the Company and NATL executed a renewal rights agreement with respect to paratransit accounts with eight or more vehicles (“Large Paratransit Accounts”). Pursuant to this agreement, the Company and NATL will work together to transition the handling of Large Paratransit Accounts to NATL during the next year. The Company received $2.9 million as consideration from NATL for this transaction.
Under the previously announced expanded agreement, the Company’s managing general agency (“MGA”) subsidiary, Anchor Group Management, Inc. (“AGMI”), will continue to manage owner operators and fleets with seven or less vehicles (“Small Paratransit Accounts”) until at least August 2021. If the Small Paratransit Account program is not extended further, NATL continues to retain the option to purchase renewal rights on this segment at the expiration of the agreement period. Under the terms of the agreements, the Company will not compete with NATL for Large Paratransit Accounts for a period of three years following the Large Paratransit Account renewal rights transaction. Other previously disclosed material terms of the agreements between the parties remains unchanged.
Scott D. Wollney, Atlas’ President & CEO said: “We are very pleased with this transaction as well as our continuing relationship with National Interstate, which we believe demonstrates the value that our MGA focused strategy delivers to our business partners, shareholders and other stakeholders. Our team has been working very effectively with the National Interstate team and is extremely pleased to be able to continue offering specialized insurance programs to smaller accounts on a go-forward basis. National Interstate continues to be an extremely valuable partner and we are proud to be working together to support paratransit operators providing essential rides across the U.S.”
Mr. Wollney continued, “Atlas and AGMI’s focus has centered around owner operators and smaller accounts and we believe the ongoing relationship confirms the core competency we’ve developed in this unique area. It is consistent with our emphasis being placed on generating EBITDA at the MGA level while endeavoring to reduce risk and capital requirements related to traditional primary insurance company operations. We will continue to pursue opportunities to leverage this expertise in other areas of specialty commercial auto as a managing agent as well.”
Piper Sandler & Co. acted as exclusive financial advisor to Atlas in connection with this transaction.
The primary business of Atlas is commercial automobile insurance in the United States, with a niche market orientation and focus on insurance for the “light” commercial automobile sector including taxi cabs, nonemergency paratransit, limousine/livery (including full-time transportation network company drivers) and business auto.
The Company’s strategy is focused on leveraging its managing general agency operation (“AGMI”) and its insuretech digital platform (“optOn”). For more information about Atlas, please visit www.atlas-fin.com , www.agmiinsurance.com , and www.getopton.com.
This release includes forward-looking statements regarding Atlas and its insurance subsidiaries and businesses. Such statements are based on the current expectations of the management of each entity. The words “anticipate,” “expect,” “believe,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or similar words are used to identify such forward looking information. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Companies, including risks regarding the insurance industry, economic factors and the equity markets generally and the risk factors discussed in the “Risk Factors” section of the Company’s 2018 Annual Report on Form 10-K. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Atlas and its subsidiaries undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
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INDUSTRY KEYWORDS: Insurance Finance Automotive General Automotive Banking Professional Services Other Automotive Other Professional Services Fleet Management