Oct. 12--After nearly being taken over by the Oklahoma Insurance Department earlier this year for insolvency, Oklahoma City-based BancInsure is re-entering the insurance industry with a new business model and a $30 million injection of new capital from a New York investment firm.
BancInsure, which once mainly offered insurance polices for community banks and other financial institutions, has a new business strategy focusing on business insurance transactions and administration.
The company decided to shift its focus in part because of a growing demand, as well as the availability of capital from the reinsurance industry, said Michael Beasley, chief operating officer and lead underwriter for BancInsure.
"This is currently the largest growing space in the insurance industry today outside of health care, and we're getting great feedback from people so far," Beasley said.
The New York-based financial services company Foster Jennings Inc. purchased BancInsure in February for $1. The company had been struggling for the past several years with losses related to the 2008 financial crisis and was under orders from state regulators to strengthen its capital position or be placed into receivership.
After Foster Jennings' investment, in the business, the Insurance Department dropped all legal action against BancInsure.
BancInsure CEO Lisa Bays took the helm of the company in March 2012 after it had sustained heavy financial losses. Bays said knew she would have to take drastic measures to save the company.
"It became evident that the only way to save the company was to sell it -- so I began talking to acquisition firms and brokers to get the word out that BancInsure was interested in a sale."
The company's key selling point was that it remained licensed to write property and casualty polices in 49 jurisdictions, Bays said.
"It's very expensive and time-consuming to license a carrier nationwide," she said.
The sale to Foster Jennings was completed within months after a broker for the firm first contacted Bays in July 2012. Foster Jennings specializes in investing in financial institutions, engineering complex financial instruments, as well as underwriting for the insurance industry.
Bays framed the $1 check Foster Jennings used to purchase the company; it's displayed in her Oklahoma City office.
Founded in 1985, BancInsure provided fidelity bonds and officers' liability insurance to community banks and other financial institutions across the country. Last year, the company sold off the renewal rights to most of its business for financial institutions to AmTrust Financial Services Inc.
The company has 18 employees in Oklahoma City.
Because of the shift in its business strategy, BancInsure is looking at changing the name of the company and having a new logo designed, but the rebranding process is still in the beginning stages, Bays said.
"We're just starting that process and beginning to think about what a new name might be," Bays said.
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