K2 Insurance Services, LLC (K2), formed in 2011 to acquire managing general agencies (MGAs) and specialty underwriters to create a leading franchise in the insurance program market, has acquired Harrisburg, Penn.-based Aegis Security Inc. (Aegis).
The combination of K2 and Aegis establishes a diversified national platform of specialty insurance programs:
* Aegis Security Insurance Company, which specializes in insurance for manufactured homes, other low-value dwellings and motorcycles. The company also underwrites surety bonds and other “niche” lines of insurance. Licensed in all 50 states, Aegis is rated “A” (Excellent) by the A.M. Best Company.
* American Sentinel Insurance Company, which specializes in accident and health insurance coverage for individuals and groups. American Sentinel is also “A”-rated.
* Mobile-Rec, an MGA focused on manufactured housing that underwrites business on behalf of Aegis Security Insurance Company.
* Cabrillo Pacific Insurance Services, LLC, a San Diego-based MGA that is part owned by Aegis. Cabrillo specializes in personal auto, homeowners’ and surplus lines insurance. Cabrillo also underwrites on behalf of Aegis, as well as other insurers.
* Midwestern Insurance Alliance, LLC, a Kentucky-based MGA that underwrites workers’ compensation coverage in 16 states. Midwestern was acquired by K2 in February 2012.
* Mission Select Insurance Services, LLC, a Texas-based MGA specializing in residential property insurance in Texas and surrounding states. Mission Select was formed by K2 in October 2012.
With the acquisition, K2 comprises a specialty insurance franchise that is expected to generate approximately $165 million of gross written premiums in 2013.
“The management team at The Aegis Group leads a very well-run, highly successful enterprise,” commented K2 President Bob Kimmel. “Aegis brings industry-leading expertise in its chosen lines of business, and we intend to provide them with additional resources to expand their franchise nationally. We believe the combination of specialized, successful MGAs and a well capitalized, nationwide carrier offers a compelling value proposition to the marketplace.
“At the same time, K2 will continue to seek other acquisition and growth opportunities around the country,” Kimmel added.
“The acquisition will not only help The Aegis Group expand with its current products, but will help us to diversify into other lines of business,” said Marty Lane, chairman, The Aegis Group. “With expanded capabilities, working with K2, we will be able to extend our franchise as a leading property-casualty insurance company nationwide.”
MGAs sell insurance coverage to their clients, but differ from other agents and brokers in that they are authorized by insurers to actually underwrite and bind risks. While they underwrite and provide services to policyholders, their insurance company partners bear the financial exposure of the insurance products. The lines of insurance MGAs specialize in comprise their insurance “programs.”
K2 was formed by Kimmel and Pat Kilkenny, chairman and CEO of K2, in partnership with investment firm Endeavour Capital.
Terms of the acquisition were not disclosed.