22 January 2021Insurance

Hallmark mulls break-up of company to 'unlock' value & boost capital access

Property and casualty insurer Hallmark Financial Services is exploring the separation of its specialty commercial business, citing that the move may "unlock significant value" for the company.

Hallmark currently has three business segments - specialty commercial, standard commercial, and personal.

The company's board believes that segregating the operational structures of its segments and establishing two separate companies may achieve a more appropriate aggregate valuation and improve access to capital.

The insurer reported that its specialty commercial segment represented 75 percent of its gross premium written through the first three quarters of 2020. The business has experienced substantial rate increases over the past 12 quarters, rising from approximately 7 percent to over 20 percent in Q3 2020.

The specialty commercial business is a diversified portfolio of products placed through wholesale brokers, with the vast majority written on an excess & surplus lines basis.

Hallmark stated that no final decision has yet been made with respect to the structure of the proposed establishment of a stand-alone specialty commercial company.

The company's board of directors and executive management team are working with financial, business and legal advisors Raymond James & Associates, Willis Re, Olshan Frome Wolosky and McGuire, Craddock & Strother to evaluate its current structure and the strategic, operational, capital and tax implications of the potential separation.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
20 July 2020   Hallmark will pay DARAG Bermuda and Guernsey $172.9 million as reinsurance premiums.
Insurance
20 January 2021   For more than two decades US insurer Prime Insurance Company has forged a path built on partnership, clear communication and a constructive approach to risk. CEO Rick Lindsey explains how it’s done to Intelligent Insurer.
Insurance
14 May 2021   The company made a profit compared to a loss in the same quarter last year.