Meadowbrook Insurance Group, Inc. Announced That It Has Entered Into A Quota
Share Reinsurance Contract With Swiss Re
SOUTHFIELD, Mich., Dec. 20, 2012
SOUTHFIELD, Mich., Dec. 20, 2012 /PRNewswire/ -- Meadowbrook Insurance Group,
Inc. (NYSE: MIG) today announced that it has entered into a quota-share
reinsurance agreement with Swiss Re under which it will cede a selected
portion of the Company's business on a proportional basis with certain
limitations. The agreement will be effective December 31, 2012 when the
Company will cede 50% of its unearned premium on the selected book of business
and receive a provisional ceding commission. In addition, the Company will
cede 25% of direct written premium on this selected book of business
commencing January 1, 2013.
The Company anticipates that the unearned premium transferred in 2012 will be
approximately $90.0 to $100.0 million dollars and the direct written premium
to be ceded in 2013 is estimated to be between $90.0 and $100.0 million
dollars. Accordingly, this transaction is expected to reduce the ratio of the
Company's net premium to statutory surplus in both 2012 and 2013.
Meadowbrook President and Chief Executive Officer Robert S. Cubbin commented,
"We are committed to our shareholders, partners, agents, customers, and
employees to solidify our A.M. Best rating. We are moving as expeditiously as
possible to solve the existing uncertainty. We believe this agreement with
Swiss Re, along with the previously announced termination of non-performing
businesses and the realization of $50.0 million of capital gains (after-tax
$37.0 million) will help alleviate the doubt relating to our rating and
establish a capital position that currently and prospectively supports our
About Meadowbrook Insurance Group
Meadowbrook Insurance Group, Inc., based in Southfield, Michigan, is a leader
in the specialty program management market. Meadowbrook includes several
agencies, claims and loss prevention facilities, self-insured management
organizations and seven property and casualty insurance underwriting
companies, including one in Bermuda. Meadowbrook has thirty-four locations in
the United States. Meadowbrook is a risk management organization, specializing
in specialty risk management solutions for agents, professional and trade
associations, and small to medium-sized insureds. Meadowbrook Insurance
Group, Inc. common shares are listed on the New York Stock Exchange under the
symbol "MIG". For further information, please visit Meadowbrook's corporate
web site at http://www.meadowbrook.com.
Certain statements made by Meadowbrook Insurance Group, Inc. in this release
may constitute forward-looking statements including, but not limited to, those
statements that include the words "believes," "expects," "anticipates,"
"estimates," or similar expressions. Please refer to the Company's most recent
10-K, 10-Q, and other filings with the Securities and Exchange Commission for
more information on risk factors. Actual results could differ materially.
These forward-looking statements involve risks and uncertainties including,
but not limited to the following: premium volume and operating leverage, the
frequency and severity of claims; uncertainties inherent in reserve estimates;
catastrophic events; a change in the demand for, pricing of, availability or
collectibility of reinsurance; increased rate pressure on premiums and on
underwriting criteria; ability to obtain rate increases in current market
conditions; investment rate of return and losses(whether realized or
unrealized) in the Company's investment portfolio; changes in and adherence to
insurance or other regulation; actions taken by regulators, rating agencies or
lenders, including possible downgrade of the company's current A- financial
strength rating; attainment of certain processing efficiencies; changing rates
of inflation; impairment of intangibles; general economic conditions; the
Company's possible ability to implement its capital raising and capital
preservation strategies in a timely manner; and other risks identified in the
Company's reports and registration statements filed with the Securities and
Exchange Commission, any of which may have a material and adverse effect on
the Company's results of operations and financial condition. Meadowbrook is
not under any obligation to (and expressly disclaims any such obligation to)
update or alter its forward-looking statements whether as a result of new
information, future events or otherwise.
SOURCE Meadowbrook Insurance Group, Inc.
Contact: Karen M. Spaun, Chief Financial Officer, +1-248-204-8178
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