Palomar to enter surety insurance market

Palomar Holdings, which owns a Bermuda-based reinsurer, is set to enter the surety insurance market with the acquisition of First Indemnity of America Insurance Company. 

The deal, reported to be for $25 million, was first announced in August. First Indemnity is domiciled in New Jersey and specialises in underwriting surety bonds for small- to medium-sized contractors, primarily in the Northeast United States. The company is licensed in 16 states and holds a Financial Strength Rating of A- (Excellent) from AM Best. 

“I am very excited to announce the completion of our acquisition of FIA and to welcome FIA’s management team, employees and insureds to Palomar,” commented Mac Armstrong (pictured), Palomar’s chairman and chief executive officer.“

This transaction provides us entry into the surety market, a highly profitable line of business with a healthy growth profile. FIA’s leaders are industry veterans with decades of underwriting and claims experience who have delivered loss ratios that have outperformed the broader surety market over the past five years.”

Armstrong added: “Expanding into the surety market represents a significant opportunity to diversify our specialty insurance portfolio with a growing, high-margin product. This acquisition strengthens our ability to generate consistent, profitable growth and enhance our long-term value for shareholders. 

“We look forward to leveraging FIA's industry expertise as we continue to drive innovation and strengthen our position in the specialty insurance sector.”

Palomar, based in California, is the holding company of subsidiaries Palomar Specialty Insurance Company, Palomar Specialty Reinsurance Company Bermuda and other subsidiaries. It is best known for earthquake coverage but also covers inland marine and other property, casualty, fronting, and crop insurance. 

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.