Hallmark Financial to acquire State Auto National Insurance

Aug 11, 2010 (Datamonitor via COMTEX) -- Hallmark Financial Services has announced the execution of an agreement for its wholly-owned subsidiary, Hallmark Insurance, to acquire State Auto National Insurance from State Auto Financial for $14 million cash at closing plus an earn-out of up to $2 million.

Hallmark expects to fund the acquisition out of working capital. The earn-out is payable quarterly in an amount equal to 2% of gross collected premiums on new or renewal personal lines insurance policies written by SAN agents during the three years following closing. Closing of the acquisition is subject to regulatory approval and other customary closing conditions.

In connection with the closing, State Auto National will enter into reinsurance agreements with an affiliate of the seller pursuant to which the affiliate will handle all claims and assume all liabilities arising under policies issued by State Auto National prior to the closing and during a transition period of up to six months following the closing.

Mark Morrison, president and CEO of Hallmark Financial Services, said: "The purchase of State Auto National Insurance Company as a clean statutory entity, along with the policy renewals of its existing book of non-standard personal automobile business, will significantly expand our personal lines business unit into new states through an already existing agency distribution."

http://www.datamonitor.com

Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon