Company Overview
| Company Name |
ATLAS FINANCIAL HOLDINGS, INC. |
| Company Address |
150 NORTHWEST POINT BOULEVARD
ELK GROVE VILLAGE, IL 60007 |
| Company Phone |
847-700-8000 |
| Company Website |
www.atlas-fin.com |
| CEO |
Scott D. Wollney |
| Employees (as of 2/12/2013) |
106 |
| State of Inc |
-- |
| Fiscal Year End |
12/31 |
| Status |
Priced (2/12/2013) |
| Proposed Symbol |
AFH |
| Exchange |
Nasdaq SmallCap Market |
| Share Price |
$5.85 |
| Shares Offered |
4,125,000 |
| Offer Amount |
$24,131,250.00 |
| Total Expenses |
$784,829.00 |
| Shares Over Alloted |
0 |
| Shareholder Shares Offered |
2,625,000 |
| Shares Outstanding |
7,644,392 |
| Lockup Period (days) |
180 |
| Lockup Expiration |
8/12/2013 |
| Quiet Period Expiration |
3/25/2013 |
| CIK |
0001539894 |
Our net proceeds from the sale of the ordinary shares that we are offering
will be approximately $7.9 million, after deducting underwriting discounts and
commissions and estimated offering expenses payable by us. If the underwriters
exercise their over-allotment option in full, our net proceeds will be
approximately $11.2 million.
We will not receive any of the proceeds from the sale of the ordinary shares
being offered by the selling shareholder.
The principal purposes of our initial offering in the United States are to
create a public market for our ordinary shares and thereby enable future
access to the public equity markets by us and our shareholders, and to obtain
additional capital. We intend to use the net proceeds to us from our offering
for working capital, to acquire complementary businesses or other assets, to
repurchase preferred shares, which accrue dividends on a cumulative basis at a
rate of $0.045 per share per year (4.5%), or for other general corporate
purposes; however we do not have any specific uses of the net proceeds planned.
Pending other uses, we intend to invest the proceeds to us in investment-grade,
interest-bearing securities such as money market funds, certificates of
deposit, or direct or guaranteed obligations of the U.S. government, or hold
as cash. We cannot predict whether the proceeds invested will yield a
favorable return. Our management will have broad discretion in the application
of the net proceeds we receive from our offering, and investors will be
relying on the judgment of our management regarding the application of the net
proceeds.
The insurance industry is price competitive in all markets in which the
insurance subsidiaries operate. Our company strives to employ disciplined
underwriting practices with the objective of rejecting under priced risks. A
recent survey by A.M Best estimates the total market for commercial automobile
liability insurance to be approximately $24 billion. We believe our company
requires only 1% market share to achieve our business plan. We believe our
current market share is approximately 0.2%.
Our company competes on a number of factors such as distribution strength,
pricing, agency relationships, policy support, claim service, and market
reputation. In our core commercial automobile lines, the primary offerings are
policies at the minimum prescribed limits in each state, as established by
statutory, municipal and other regulations. We believe our company
differentiates itself from many larger companies competing for this specialty
business by exclusively focusing on these lines of insurance. We believe our
exclusive focus results in the deployment of underwriting and claims
professionals more in tune with issues common in commercial automobile lines,
and provides the customer better service.
In the specialty insurance market, American Country and American Service
compete against, among others, American Transit Insurance Company
(New York only), Canal Insurance Company, CNA Financial Corporation, Carolina
Casualty Insurance Company, Empire Fire & Marine Insurance Company
(subsidiary of Zurich Financial Services Ltd.), Global Liberty Insurance
Company of New York, Granada Insurance Company, Hereford Holding Company,
Inc., Hartford Financial Services Group, Lancer Financial Group, MAPFRE USA,
Maya Assurance Company, Mercury General Corporation, National Indemnity
Company (subsidiary of Berkshire Hathaway, Inc.), National Interstate
Corporation, Northland Insurance Company (subsidiary of Travelers Companies,
Inc.), Safeco Corporation (subsidiary of Liberty Mutual), Scottsdale Insurance
Company (National Casualty Company) and ULLICO, Inc.
To compete successfully in the specialty commercial insurance industry, we
rely on our ability to: identify markets that are most likely to produce an
underwriting profit; operate with a disciplined underwriting approach; offer
diversified products and geographic platforms; practice prudent claims
management; reserve appropriately for unpaid claims; strive for cost
containment through economies of scale where deemed appropriate; and provide
services and competitive commissions to our independent agents.
Company Description
We are a financial services holding company incorporated under the laws of the
Cayman Islands. Our core business is the underwriting of commercial automobile
insurance policies, focusing on the “light” commercial automobile sector, which
is carried out through our insurance subsidiaries, American
Country Insurance
Company, or American Country, and American Service Insurance Company, Inc., or
American Service, together with American Country, which we refer to as our
“insurance subsidiaries”. This sector includes taxi cabs, non-emergency
para-transit, limousine, livery and business auto. Our goal is to be the
preferred specialty commercial transportation insurer in any geographic areas
where our value proposition delivers benefit to all stakeholders.
We were formed as JJR VI, a Canadian capital pool company, on December 21, 2009
under the laws of Ontario, Canada. On December 31, 2010, we completed a reverse
merger wherein American Service and American Country were transferred to us by
Kingsway America Inc., or KAI, a wholly owned subsidiary of Kingsway Financial
Services Inc., or KFSI, a Canadian public company whose shares are traded on the
Toronto and New York Stock Exchanges. Prior to the transaction, each of American
Service and American Country were wholly owned subsidiaries of KAI. American
Country commenced operations in 1979. With roots dating back to 1925 selling
insurance for taxi cabs, American Country is one of the oldest insurers of U.S.
taxi and livery business. In 1983, American Service began as a non-standard
personal and commercial auto insurer writing business in the Chicago, Illinois
area.
In connection with the acquisition of American Service and American Country, we
streamlined the operations of the insurance subsidiaries to focus on the “light”
commercial automobile lines of business we believe will produce favorable
underwriting results. Over the past two years, we have disposed of non-core
assets and placed into run-off certain non-core lines of business previously
written by the insurance subsidiaries. Our focus going forward is the
underwriting of commercial automobile insurance in the U.S.
Substantially all of our new premiums written are in “light” commercial
automobile lines of business. Our core commercial automobile line of business
accounted for 92.6% of our gross premium written in the nine month period ended
September 30, 2012, compared with 44.0% of our gross premium written in the nine
month period ended September 30, 2011. For the same period, the gross premium
written from our core commercial automobile line of business increased by 183%
relative to the nine month period ended September 30, 2011.
We are committed to the “light” commercial automobile lines of business. The
insurance subsidiaries distribute their products through a network of
independent retail agents, and actively wrote insurance in 31 states as of
September 30, 2012. Together, American Country and American Service are licensed
to write property and casualty, or P&C, insurance in 46 states plus the District
of Columbia in the United States. American Country and American Service actively
wrote commercial automobile insurance in more states during 2012 than in any
prior year.
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The address of our registered office is Cricket Square, Hutchins Drive, PO
Box 2681, Grand Cayman, KY1-1111, Cayman Islands. Our operating headquarters
are located at 150 Northwest Point Boulevard, Elk Grove Village, Illinois
60007, USA. We maintain a website at www.atlas-fin.com.