EGI Financial buys American Colonial Insurance

Steven Lamb | March 1, 2010

EGI Financial Holdings has announced that its U.S.-based subsidiary, Echelon Insurance Company of America (EICA), has acquired all of the issued and outstanding shares of American Colonial Insurance Company, Inc.

American Colonial has not underwritten any insurance business since 2002 and has no employees, nor any ongoing obligations for business infrastructure.

"The acquisition of American Colonial, along with the recent approval of our Florida auto insurance rate filing are major steps in the advancement of the Company's strategies to underwrite non-standard automobile insurance in the southeastern United States," said James Cizek, CEO of Echelon. "We now have the critical platform and infrastructure to pursue organic growth, while continuing to seek acquisitions which meet the Company's value criteria."

American Colonial is a Florida-domiciled property and casualty insurance company, with licenses to transact private passenger auto insurance in Georgia, Alabama and Louisiana.

The deal is valued at about US$4.6 million, based on American Colonial's statutory book value, net of obligations for remaining outstanding claims, with securities marked to market, plus US $200,000.

State regulators have approved the merger of American Colonial with Echelon. American Colonial will continue as the surviving corporation, with all of Echelon's operating infrastructure assumed by American Colonial.