Genstar Capital Management LLC, a middle market private equity firm that focuses on investments in selected segments of the financial services, software, healthcare and industrial technology industries, announced that it has partnered with insurance industry veteran David M. “Mac” Armstrong to establish a new platform company, Palomar Insurance Holdings, that will initially serve as a pure-play provider of commercial and residential earthquake insurance.
The company was funded with $75 million of equity capital from Genstar and the management team.
Concurrent with the investment, Palomar Insurance Holdings acquired an admitted insurance company from a national insurer that is licensed to underwrite business in seven states and subsequently changed the name to Palomar Specialty Insurance Co.
Palomar initially will focus on the residential and commercial earthquake markets in earthquake-exposed states such as California, Oregon, Washington and Missouri where Genstar says consumers tend to have limited options to purchase earthquake insurance.
Genstar is partnering with Armstrong, former president of Arrowhead General Insurance Agency Inc., a large program administrator in the property and casualty insurance sector with over $800 million in written premium. Armstrong will lead Palomar as chief executive officer.
Genstar and Palomar have assembled a team of insurance professionals with earthquake insurance experience. Armstrong, president Heath Fisher, chief underwriting officer Andrew Robinson and chief operating officer Jon Christianson have over 50 years of experience in the earthquake insurance market and have deep relationships with the distribution sources and reinsurers required to effectively service the market, according to Genstar. Palomar will distribute its product through a network of program administrators as well as selected retail producers and wholesale brokers.
“Palomar is well capitalized and we look forward to working with Mac and his extremely talented management team to pursue the growth and development initiatives we have identified in the approximately $4 billion earthquake insurance market,” said J. Ryan Clark, managing director at Genstar.