Atlas Financial Holdings, Inc. (NASDAQ:AFH) ("Atlas" or the
"Company") announced today that as an initial outcome of its
strategic review, Atlas concluded that the utilization of its wholly
owned Managing General Agency ("MGA") operation to work with strategic
external insurance and reinsurance partners will enable the Company to
leverage its focus, experience and infrastructure to create value for
A definitive agreement was executed effective June 10, 2019 between
Atlas and American Financial Group, Inc. (NYSE:AFG). Under this
agreement Atlas will act as an underwriting manager for AFG's National
Interstate ("NATL") subsidiary and transition new and renewal
paratransit business to NATL paper for this book of business. This
strategic arrangement will combine Atlas' niche platform including the
analytics and technology Atlas has developed based on decades of
expertise and data in this specialized area of commercial automobile
insurance with AFG and NATL's strong financial position and disciplined
underwriting focus. Starting in July 2019, Atlas' wholly owned insurance
subsidiaries will cease writing new paratransit business and begin
writing both new business and transitioning the existing paratransit
business to the underwriting management arrangement with NATL. Sandler
O'Neill + Partners, L.P. advised the Company on this transaction.
Under the agreement, AFG has certain rights including a warrant to
acquire 19.9% of the outstanding AFH common stock for $0.69 per share
and an option to purchase the renewal rights owned by the Company in the
future. This program will continue to focus on small fleet operations in
this unique and important niche market. In 2018, paratransit business
represented approximately $110 million of the Company's gross written
premium. The Company estimates that the majority of this business will
be eligible for quotation over the first twelve month of this
Scott D. Wollney, Atlas' President & CEO said "We are excited to partner
with American Financial Group and National Interstate to transition this
business in a strategic approach that we expect to benefit both
companies. Continuing to provide our distribution partners and
policyholders with the specialized customer-centric value proposition
they expect from Atlas in partnership with one of the largest commercial
auto focused companies in the country at a time when the market is hard
is extremely valuable to all involved."
Atlas is also working on additional arrangements with the objective of
establishing MGA relationships in connection with the Company's other
lines of business as well.
The Company is continuing to work with its appointed strategic advisor,
Sandler O'Neill + Partners, L.P., in an effort to maximize value for all
shareholders and will provide additional updates as previously
The primary business of Atlas is commercial
automobile insurance in the United States, with a niche market
orientation and focus on insurance for the "light" commercial automobile
sector including taxi cabs, non-emergency para-transit, limousine/livery
(including certain transportation network company drivers) and business
auto. The business of Atlas is carried on through its subsidiaries
American Country Insurance Company, American Service Insurance Company,
Inc., Gateway Insurance Company, Global Liberty Insurance Company of New
York, Anchor Group Management, Inc., and optOn Insurance Agency Inc.
Atlas' insurance subsidiaries have decades of experience with a
commitment to always being an industry leader in these specialized areas
For more information about Atlas, please visit www.atlas-fin.com.
This release includes
forward-looking statements regarding Atlas and its insurance
subsidiaries and businesses. Such statements are based on the current
expectations of the management of each entity. The words "anticipate,"
"expect," "believe," "may," "should," "estimate," "project," "outlook,"
"forecast" or similar words are used to identify such forward looking
information. The forward-looking events and circumstances discussed in
this release may not occur and could differ materially as a result of
known and unknown risk factors and uncertainties affecting the
Companies, including risks regarding the insurance industry, economic
factors and the equity markets generally and the risk factors discussed
in the "Risk Factors" section of the Company's 2017 Annual Report on
Form 10-K. No forward-looking statement can be guaranteed. Except as
required by applicable securities laws, forward-looking statements speak
only as of the date on which they are made and Atlas and its
subsidiaries undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise.
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Source: Atlas Financial Holdings, Inc.