December 13, 2006 by Canadian Underwriter
EGI Financial Holdings Inc. has entered the United States non-standard automobile insurance market, signing a reinsurance treaty with AssuranceAmerica Insurance Company (AAIC).
AAIC has accepted EGI Financial Holdings’ authorization to underwrite 17.6% of AssuranceAmerica’s 2007 quota share reinsurance treaty. Under this reinsurance agreement, Echelon will accept a maximum of US$15 million of non-standard automobile premiums in 2007 (the year the treaty starts).
The treaty’s initial duration is for two years, and will continue for annual periods thereafter, unless AAIC or Echelon decides to terminate it.
“Our agreement with AssuranceAmerica marks Echelon’s first move into the United States market, while staying within our specialty auto niche,” said Douglas McIntyre, the CEO of both EGI Financial and Echelon. “AssuranceAmerica brings significant underwriting expertise and distribution capability in this market. They are a young, rapidly growing and very well managed organization. This joint venture enables EGI to expand profitably into the U.S. market while mitigating any associated risk.”
Bud Stumbaugh, the CEO of AssuranceAmerica, said: “We have been impressed with Echelon’s understanding and responsiveness to our requirements, to provide secure reinsurance coverage to our growing market of non-standard drivers.”
AAIC is a provider of property and casualty insurance to the non-standard private passenger automobile portion of the industry. The company currently operates directly or through managed insurers in Georgia, South Carolina, Alabama, Florida, Texas and Louisiana.