“We have not been in Hawaii, and this gives us an immediate presence,” said Heritage Insurance Holdings spokesperson Melanie Skijus, about Heritage’s purchase of Zephyr Insurance Company.
Zephyr, founded in 2000, offers one product only, in one place only—wind insurance for personal and commercial residential in Hawaii. Today it has a healthy 30% of that market, available through the reinsurance market and through various homeowners insurance companies.
“With 80 agents in place, this purchase gives us a very nice presence in Hawaii,” said Skijus.
Based in Clearwater, FLA, Heritage Property and Casualty writes more than $500 million in personal and commercial residential premiums. Heritage has filed to expand into North Carolina, South Carolina, Massachusetts and Rhode Island as well.
“We want to diversity out of Florida and Hawaii has low loss ratios,” said Skijus. “The chance of a hurricane hitting both Florida and Hawaii is small. This gives us some nice reinsurance synergies and should help our profit margin,” she said.
The all-cash transaction, valued at $120 million, is expected to close in the fourth quarter, subject to numerous conditions.
“We are extremely excited to announce the transaction with Zephyr,” said Heritage CEO Bruce Lucas. He said the deal will be funded with current capital. “The combination of our complementary business models will be immediately accretive to earnings, book value and return on equity,” he added.
Who doesn’t want to go to Hawaii?