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SOURCE BancInsure, Inc.
BancInsure to pursue new non-bank business strategy, adopt new brand name
OKLAHOMA CITY, Oct. 7, 2013 /PRNewswire/ -- BancInsure, a former provider of insurance to community banks that experienced surplus erosion as a result of the recent financial crisis, has reentered the insurance marketplace with a new business strategy focusing on non-financial customers and with a $30 million capital investment from its new owner, Foster Jennings, Inc., a New York-based diversified financial services holding company.
Following its financial losses in 2011 and 2012, BancInsure became the subject of administrative proceedings by the Oklahoma Insurance Department. The issues involved in those proceedings were resolved after Foster Jennings acquired BancInsure from BMSI Holdings, Inc. and made its capital investment. Separately, BancInsure's community bank business was acquired by AmTrust Financial Services, Inc.
"Following those actions, the department, led by Commissioner John Doak, dismissed all legal and administrative matters against the company," explained Lisa Bays, chief executive officer, BancInsure. Bays, previously the company's general counsel, said that throughout the recent financial difficulties she was convinced that, with the right investors, the company would be a successful insurance enterprise.
"The financial backing of Foster Jennings, which has a strong track record as a financial services holding company, coupled with the dedication of our talented staff, is a major boost as we undertake our new business strategy," she added.
The new strategy
That strategy will involve writing business in the program distribution segment of the industry, where managing general agents and program administrators focus on insurance for specific types or classes of businesses, from commercial auto fleets and real estate agents to marinas and wind turbines.
Chief Operating Officer and Underwriting Head Michael Beasley, who led development of the strategy, said the company has already been in the market and is considering programs involving these and many other types of businesses.
Beasley said that, with reinsurance capital and capacity at an all-time high, the $50 billion program distribution market is growing annually at "double-digit rates."
"We will provide auto, general liability, property and surety coverages for a variety of programs – typically, accounts with between $3 million and $20 million in premiums," he said. "We will take minority risk positions on these accounts, ceding the remaining risk to A-rated reinsurers. This strategy has been positively received by several strong reinsurance companies."
During his 22-year career in the property-casualty insurance industry, Beasley has been involved in "turnarounds" similar to BancInsure's. He has worked with insurers, reinsurers, managing general agencies and private equity firms.
He acknowledged that, as the company no longer writes insurance for banks, it will need a new brand name, and hopes to have one soon. "For now, with a clean bill of health and a sound strategy, we're eager to build partnerships across the country's program distribution marketplace."
Oklahoma City-based BancInsure, Inc. is a non-rated insurance carrier admitted in 48 states and the District of Columbia, and licensed to write property and casualty insurance products. A Foster Jennings company, its management team has more than 100 years' combined insurance industry experience. Its board of directors includes Lisa Bays, chief executive officer, Scott Hartman, Foster Jennings chairman and chief executive officer, and Andrew Scherr, Foster Jennings' vice chairman and chief financial officer.
About Foster Jennings
Headquartered in New York City, Foster Jennings, Inc. is a financial services holding company focusing on the insurance industry and on structured financial products. Foster Jennings is committed to growing within the insurance industry and has raised $375 million for this effort.
Foster Jennings was founded in 2009 by Hartman, a highly successful private equity veteran with 25 years' experience, and Scherr, who has substantial insurance experience and has led global financial groups as an investment banker, attorney and structured financial products specialist.
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