FedNat invests $15m in Monarch; ‘materially’ exits non-Florida markets
US insurer FedNat has invested £15 million in its subsidiary Monarch National Insurance Company, assuming approximately 78,000 policies following the approval of the Florida Office of Insurance Regulation (OIR).
The investment was made through the funds managed by Hale Partnership Capital Management. With the closing of the transaction, Hale Group has become the majority owner of Monarch, with FedNat holding a minority interest and maintaining representation on Monarch’s board.
FedNat Underwriters, a wholly owned subsidiary of FedNat, will continue to undertake policy servicing and claims administration with respect to the policies transferred to Monarch.
Monarch obtained catastrophe excess of loss reinsurance for the 2022-2023 storm season, protecting policyholders and Monarch’s surplus consistent with its historical reinsurance structure. Monarch anticipates that its reinsurance structure will provide appropriate and responsible protection against multiple catastrophic events.
FNIC’s other remaining Florida policies were cancelled effective June 29, 2022. FNIC’s non-Florida policies have been cancelled, expired or assumed at this time. The Florida policies of Maison Insurance Company (Maison), which is currently in run off, were cancelled effective June 29, 2022, and the vast majority of Maison’s non-Florida policies have been cancelled or expired, with the exception of approximately 7,650 Texas policies that will expire over the next nine months.
Michael Braun, FedNat's chief executive officer, said, “FedNat has materially exited non-Florida markets and expects to complete our transition in coming months as we continue to refocus solely on our historical market in Florida, which we believe will result in a financially stronger company, with less volatility, that will be rightsized to our current capital and surplus position.”
Steve Hale commented: “My firm and investment partners are delighted to invest $15 million into Monarch and facilitate the support of approximately 83,000 Florida policyholders. I look forward to exploring more opportunities for investment within the Florida insurance market.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
