In sync with the long term strategy to grow its non standard
line of business,
Everest Re Group, Ltd.
) has entered into an agreement with Arrowhead General Insurance
Agency, Inc. (Arrowhead), a subsidiary of
Brown & Brown, Inc.
The agreement involves Everest Re's subsidiary Everest
Security Insurance Company, ("ESIC"). Per the agreement ESIC will
transfer to Arrowhead specific assets associated with its
non-standard automobile business.
Non-standard auto insurance provides coverage to drivers who,
due to their driving record, age, vehicle type, or some other
factor, represent higher than normal risks and do not qualify for
coverage in standard markets. As required, these perceived higher
risk drivers pay substantially higher premiums than standard
With effect from Apr 1, 2013, all the employees of ESIC will
change their position to begin to serve Arrowhead. The combined
book of non-standard automobile business will be managed solely
by Everest, who will be its exclusive underwriter.
Everest's non-standard automobile businesses will more than
double from $30 million at present to approximately $80 million
after the agreement.
The agreement will provide synergy for both parties involved.
The superior financial strength of Everest Re is expected to
perfectly complement Arrowhead's deep experience in the non
standard automobile insurance line of business.
Everest Re has had a long standing relationship with
Arrowhead. The former writes several programs for the latter.
Everest Re is attracted towards the non-standard line of
business since it has been growing steadily, over the past many
years. The growth in this line of business is because larger
standard auto insurers are tightening their underwriting
standards, driving more insureds into the non-standard ranks.
Moreover, improved implementation by the states of mandatory
insurance laws is driving demand for such insurance. Therefore,
the nonstandard market is expected to grow faster than personal
Other companies that provide non-standard automobile insurance
), among others.
Everest Re currently retains a Zacks Rank #2 (Buy).
BROWN & BROWN (BRO): Free Stock Analysis
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EVEREST RE LTD (RE): Free Stock Analysis
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