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TORONTO, Dec. 13 /CNW/ - EGI Financial Holdings Inc. (TSX: EFH) today
announces the acceptance by AssuranceAmerica Insurance Company (AAIC) of
Echelon's authorization to underwrite 17.6% of AssuranceAmerica's 2007 quota
share reinsurance treaty.
A wholly-owned subsidiary of AssuranceAmerica Corporation (OTC BB: ASAM),
AssuranceAmerica Insurance Company provides property and casualty insurance to
the non-standard private passenger automobile segment of the industry. The
company currently operates directly or through managed insurers in Georgia,
South Carolina, Alabama, Florida, Texas and Louisiana, receiving business
through both independent and owned retail agencies. AssuranceAmerica Insurance
Company retains 30% of gross premiums written and reinsures 70% of the
premiums and losses associated with the business, with highly rated
reinsurers, pursuant to the quota share treaty.
Under the reinsurance agreement, Echelon has agreed to accept a maximum
of US$15 million of non-standard automobile premiums in 2007 (the first year
of the new treaty). The treaty has an initial term of two years and continues
for annual periods thereafter unless terminated by either party. The ceding
commission and other treaty terms accepted by Echelon have been negotiated
between AAIC and its domestic lead reinsurer, a non-standard automobile
reinsurance specialist, rated A- (Excellent) by A.M. Best, the leading
insurance rating agency.
"Our agreement with AssuranceAmerica marks Echelon's first move into the
United States market, while staying within our specialty auto niche," said
Douglas McIntyre, Chief Executive Officer of both EGI Financial and Echelon.
"AssuranceAmerica brings significant underwriting expertise and distribution
capability in this market. They are a young, rapidly growing and very well
managed organization. This joint venture enables EGI to expand profitably into
the U.S. market while mitigating any associated risk."
"We have been impressed with Echelon's understanding and responsiveness
to our requirements, to provide secure reinsurance coverage to our growing
market of non-standard drivers." said Bud Stumbaugh, Chief Executive Officer
of AssuranceAmerica. "Echelon underwrites several other specialty products in
Canada, which certainly may be saleable through our distribution channel."
Founded in 1997, EGI Financial operates in the property and casualty
insurance industry in Canada, primarily focusing on non-standard automobile
insurance and other niche and specialty general insurance products.
This news release contains forward-looking information based on current
expectations. This information is subject to risks and uncertainties. A
variety of material factors, many of which are beyond EGI Financial's control,
affect the operations, performance and results of EGI Financial and its
business, and could cause actual results to differ materially from the
expectations expressed in this forward-looking information. EGI Financial does
not undertake to update any forward-looking information. Additional
information about the risks and uncertainties about EGI Financial's business
is provided in its disclosure materials, including its annual information
form, filed with the securities regulatory authorities in Canada, available at
www.sedar.com.
%SEDAR: 00022868E
For further information: Douglas E. McIntyre, Chief Executive Officer,
EGI Financial Holdings Inc., (905) 565-7960
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