Hallmark Financial Exploring the Separation of its Specialty Commercial Business
DALLAS, Jan. 21, 2021 (GLOBE NEWSWIRE) -- Hallmark Financial Services, Inc. (the “Company” or “Hallmark Financial”), a property and casualty insurance company comprised of three business segments (Specialty Commercial, Standard Commercial, and Personal), announced that it is exploring the separation of its Specialty Commercial business.
Initial evaluations by Hallmark Financial’s Board of Directors indicate that separating the Specialty Commercial business may unlock significant value by segregating the operational structures of its segments. Each segment currently operates under a unique business model, utilizes its own distribution channels and has a different return profile. The Board believes that establishing two separate companies may achieve a more appropriate aggregate valuation and improve access to capital.
Hallmark Financial’s Specialty Commercial segment represented 75% of the Company’s gross premium written, and 68% of its net premium written, through the first three quarters of 2020. This business has experienced substantial rate increases over the past 12 quarters, rising from approximately 7% to over 20% in Q3 2020. The Specialty Commercial business is a diversified portfolio of products placed almost exclusively through wholesale brokers, with the vast majority written on an Excess & Surplus lines basis.
Hallmark Financial’s Board of Directors and executive management team are working with assistance from its financial, business and legal advisors Raymond James & Associates, Inc., Willis Re Inc., Olshan Frome Wolosky LLP and McGuire, Craddock & Strother, P.C. to evaluate the Company’s current structure and the strategic, operational, capital and tax implications of the potential separation. Additionally, the Board of Directors has engaged the executive search firm Reilly Partners, Inc. of Chicago to identify qualified candidates to serve as the chief executive officer of a stand-alone Specialty Commercial company.
No final decision has yet been made with respect to the structure of the proposed establishment of a stand-alone Specialty Commercial company. No assurance can be given whether a separation transaction will take place, the form of any such transaction or the timing of any transaction. Any separation of the Specialty Commercial business remains subject to numerous conditions and approvals including, but not limited to, the approval of the Board of Directors and required regulatory approvals.
About Hallmark Financial
Hallmark Financial is a property and casualty insurance company with a diversified portfolio of insurance products written on a national platform. Through its six insurance subsidiaries, Hallmark Financial markets, underwrites and services both commercial and personal lines insurance in select markets. Hallmark Financial is headquartered in Dallas, Texas and its common stock is listed on NASDAQ under the symbol "HALL".
Investor Contact
David Webb
Senior Vice President, Corporate Development & Strategy
817.348.1600
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