CINCINNATI, Ohio and LONG BEACH, NY, December 31, 2021 /PRNewswire/ — Core Specialty Insurance Holdings, Inc. and its subsidiaries (“Core Specialty” or the “Company”) and Lancer Insurance Company (“Lancer”), both specialty property and casualty insurers (“P&C”), announced today the completion of the merger bringing together the companies through a transaction in shares and in cash, previously announced on April 16, 2021. Lancer brings to Core Specialty over 35 years of specialized commercial automotive expertise that extends the capabilities of Core Specialty’s existing diverse line of specialty property and casualty insurance products. This combination brings together two very complementary companies with a shared strategic vision to become the leader in specialized P&C insurance. The companies previously partners of January 2021 to launch a new excess transportation program. Post-merger Core Specialty will be an even more diverse company with an attractive business profile, healthy balance sheet and more $1.1 billion in equity.
This merger with Lancer marks Core Specialty’s first merger or acquisition since the recapitalization of StarStone US in November 2020. The Lancer and Core Specialty set has approximately 600 employees in total. Lancer, which has been a leading provider of leading specialty insurance solutions to businesses and commercial transportation companies across the United States for more than 35 years, will retain its brand, management team and operating sites. Lancer and Core Specialty work together to ensure that all policyholders continue to receive industry-leading products and services and to align combined operations in the best interests of customers, agents, brokers and employees. Core Specialty operates under a business unit philosophy that allows its divisions to make local decisions for underwriting, claims and policy servicing with a high degree of autonomy and full accountability.
Lancer shareholders received a combination of Core Specialty common stock, preferred stock and cash in the merger. Newly issued preferred shares of Core Specialty will be compulsorily converted into common stock upon an initial public offering of Core Specialty or certain other specified events. In addition, existing Lancer shareholders will retain the financial impact of the development on Lancer’s existing reserves for losses and loss adjustment expenses over a period of five calendar years within a specified symmetric range. The transaction is expected to be accretive to Core Specialty’s earnings per share and return on equity in 2022.
Jeff Consolino will continue to lead the combined company as President and Chief Executive Officer and Ed Nounan will continue as Executive Chairman of Core Specialty. David Delaney, CEO of Lancer, has joined the Core Specialty Board of Directors and will work closely with Mr. Consolino and senior members of the Lancer and Core Specialty teams in integrating the businesses. Core Specialty’s board of directors will consist of the current board plus Mr. Delaney. Matthew Jenkinspresident and chief operating officer of Lancer, will serve as president of the Lancer division of Core Specialty.
Jeff Consolino said, “From its inception, Core Specialty’s vision has been to become the premier specialty insurer and the Lancer merger continues our very strong progression in our mission. Core Specialty has the capital to take risks, the underwriting talent in place, a proven and decisive team collectively and in each of our specialized niche business units, we intend to operate with a strong entrepreneurial spirit and dynamism, speed, agility and a grip autonomous decision.
Lancer is a leader in the specialty transportation market with a long track record and a management team we know and admire. Lancer will operate as Core Specialty’s ninth specialty casualty insurance business unit. »
David Delaneyco-founder and CEO of Lancer, said, “All of us at Lancer are thrilled to be partnering with Core Specialty. Core Specialty’s management team is exceptional and our friendship with Jeff Consolino, Ed Nounan and Core Specialty board members go back a long way. I am confident that the combined operational and financial resources of Lancer and Core Specialty will create tremendous growth opportunities for our shareholders, employees, policyholders and distribution partners. »
“I knew David Delaney for over 30 years. He is an excellent specialist P&C insurance operator, and I am delighted to have him join the Core Specialty Board. We have assembled a Board of Directors for Core Specialty made up of business founders and business builders that we believe is second to none, and Dave’s talents will add significantly to our Board of Directors. We are also thrilled and honored that after decades of building Lancer as an independent family business, Dave and his fellow shareholders have confidence in Core Specialty’s management, business plan and investors to exchange their Lancer capital for the opportunity to join their future prospects with ours,” said Ed NounanExecutive Chairman of Core Specialty.
Basic Specialty Update
Since June 30, 2020 agreement by Core Specialty to recapitalize StarStone US, the company grew from four business units to nine through: the formation of a new Excess & Surplus Property division, the creation of a Marine and Energy division from the managed business by StarStone London, the separation and hiring of new leaders for our Errors and Omissions Professional Liability and D&O Management Professional Liability Divisions, launching an Agriculture Division and completing the Lancer fusion.
Core Specialty gross premium written for the twelve month period ended September 30, 2021 has been $1.7 billion and pro forma for Lancer fusion would be $1.9 billion.
About the basic specialty
Core Specialty offers a diverse line of property and casualty insurance products for small and medium-sized businesses. From its underwriting offices across the United States, the company focuses on niche markets, local distribution and superior underwriting knowledge; offering traditional and innovative insurance solutions to meet the needs of its clients and brokers. Core Specialty is an insurance holding company operating through StarStone Specialty Insurance Company, a U.S. insurer of excess and excess lines, and StarStone National Insurance Company, an insurer of recognized U.S. markets. The Company is rated A- (Excellent) by AM Best. For more information on Core Specialty, please visit www.corespecialty.com.
About Lancer Insurance Company
Lancer Insurance Company has been a leading provider of premier specialty insurance solutions to businesses and commercial transportation companies across the United States for over 35 years, leveraging a network of over 2 000 relationships with brokers. Lancer specializes in automobile liability, bodily injury, freight and general liability insurance. Lancer has consistently been rated A- (Excellent) for financial strength and stability by AM Best, one of the insurance industry’s most recognized rating systems. Please visit www.lancerassurance.com for more information.
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