State National Announces Extension of Nephila Partnership
November 12 2015 - 3:16PM
State National Companies, Inc. (NASDAQ:SNC), a leading specialty
provider of property and casualty insurance, today announced that
it has extended its partnership with Nephila Capital Ltd., a
leading investment manager specializing in catastrophe insurance
risk.
This new arrangement demonstrates Nephila’s long-term commitment
to State National as its partner to access the primary market for
U.S. catastrophe exposed property business. In exchange for the
continued exclusive right to produce such catastrophe exposed
property insurance via State National, Nephila has agreed to pay
State National contractual minimum ceding fees through 2019.
“This is a transformative alliance in our industry. We are proud
to extend our partnership with Nephila, and thereby further
validate the pairing of a leading investment manager specializing
in catastrophe insurance risk with our preeminent fronting services
and access to the U.S. market. We are now both better positioned to
benefit from the market trends that we believe will generate
attractive growth for both Nephila and State National,” commented
Terry Ledbetter, State National’s Chairman, President and Chief
Executive Officer.
New Extended Agreement -
Minimum Fees |
|
|
|
|
|
|
|
|
|
Prior
2014 |
|
New
Extended |
|
|
($ millions) |
Agreement |
|
Agreement |
|
Change |
2016 |
$ |
19.50 |
|
|
$ |
14.00 |
|
|
$ |
(5.50 |
) |
2017 |
|
5.00 |
|
|
|
10.00 |
|
|
|
5.00 |
|
Two year total |
$ |
24.50 |
|
|
$ |
24.00 |
|
|
$ |
(0.50 |
) |
2018 |
|
- |
|
|
|
12.50 |
|
|
|
12.50 |
|
2019 |
|
- |
|
|
|
15.00 |
|
|
|
15.00 |
|
Four year total |
$ |
24.50 |
|
|
$ |
51.50 |
|
|
$ |
27.00 |
|
The contractual minimum fees are subject to State National’s
maintaining its “A” A.M Best rating, with potential reductions if
State National is unable to provide production year capacity or is
otherwise constrained from writing premium. Furthermore,
under certain circumstances, Nephila may terminate the exclusivity,
which would reduce the minimum fees to a total of $32.5 million for
2016 through 2019. In the event of such a termination, State
National would have the ability to write the catastrophe exposed
property business for other capacity providers.
“Working with State National provides the conduit necessary for
us to access the primary insurance market. We are pleased to
have strengthened our partnership with State National through this
new arrangement, which aligns with our business plan and provides
enhanced opportunities to efficiently deliver insurance risk to our
investors,” said Frank Majors, Nephila’s Managing
Partner.
Conference Call
State National will host a conference on November 13, 2015 at
10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss its
third quarter 2015 results and the new arrangements with
Nephila. To access the call live, dial (716) 247-5810 and use
the passcode 53788912# at least 10 minutes prior to the start
time. Alternatively, investors can listen live over the
Internet by visiting the Company’s website at
http://ir.statenational.com/. For those who cannot listen to
the live call, a telephonic replay will be available through
November 20, 2015 and may be accessed by calling (404) 537-3406 and
using pass code 53788912#. Also, an archive of the webcast
will be available after the call for a period of 90 days on the
“Investor Relations” section of the Company's website at
http://www.statenational.com/.
About State National Companies, Inc.
State National Companies, Inc. (NASDAQ:SNC) is a leading
specialty provider of property and casualty insurance operating in
two niche markets across the United States. In its Program
Services segment, the Company leverages its “A” (Excellent) A.M.
Best rating, expansive licenses and reputation to provide access to
the U.S. property and casualty insurance market in exchange for
ceding fees. In its Lender Services segment, the company
specializes in providing collateral protection insurance, which
insures personal automobiles and other vehicles held as collateral
for loans made by credit unions, banks and specialty finance
companies. To learn more, please visit www.statenational.com.
The Company routinely posts important company information on its
website.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Various statements contained in this press release are
forward-looking statements made pursuant to the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements may include projections and
estimates concerning the timing and success of specific projects
and our future production, revenues, income and capital spending.
Our forward-looking statements are generally, but not always,
accompanied by words such as “estimate,” “believe,” “expect,”
“will,” “plan,” “target,” “could” or other words that convey
the uncertainty of future events or outcomes.
There can be no assurance that actual developments will be those
anticipated by us. Actual results may differ materially from those
expressed or implied in these statements as a result of significant
risks and uncertainties, including, but not limited to, our
ability to recover from our capacity providers, the cost and
availability of reinsurance coverage, challenges to our use of
issuing carrier or fronting arrangements by regulators or changes
in state or federal insurance or other statutes or regulations,
our dependence on a limited number of business partners, potential
regulatory scrutiny of lender-placed automobile insurance, level of
new car sales, availability of credit for vehicle purchases and
other factors affecting automobile financing, our ability to
compete effectively, a downgrade in the financial strength ratings
of our insurance subsidiaries, our ability to accurately underwrite
and price our products and to maintain and establish accurate loss
reserves, changes in interest rates or other changes in the
financial markets, the effects of emerging claim and coverage
issues, changes in the demand for our products, the effect of
general economic conditions, breaches in data security or other
disruptions with our technology, and changes in pricing or
other competitive environments.
Forward-looking statements involve inherent risks and
uncertainties that are difficult to predict, many of which are
beyond our control. Additional information about these risks and
uncertainties is contained in our filings with the Securities and
Exchange Commission. The forward-looking statements in this press
release speak only as of the date of this release, and we
undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
State National Companies, Inc.
David Hale, COO & CFO
817-265-2000
Dennard ▪ Lascar Associates
Rick Black
713-529-6600
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