Affirmative Insurance Acquires Two Agencies

Both transactions are expected to be completed within the next two weeks.

Affirmative said it would acquire 24 retail agency stores and 42 franchise locations in Florida from 21^st Century. The two operate under the FED USA brand and produce approximately $50 million in non-standard auto insurance premiums for multiple carriers.

Affirmative would pay $7 million in cash at closing and an additional $2.5 million subject to performance criteria being met. The company said the acquired agencies would continue to produce business for 21^st Century and other carriers.

In Texas, Affirmative is acquiring 10 retail stores from BW, nine agencies in Houston and one in Beaumont, which produce approximately $5 million of non-standard auto insurance premium.

BW would receive $750,000 cash at closing and an additional $750,000 subject to performance criteria being met.

The stores would be renamed A-Affordable and would produce business under A-Affordable's multiple company distribution model.

Thomas E. Mangold, president and chief executive officer of Affirmative Insurance said in a statement that the deals would help his company capture a larger share of Florida's $3.7 billion non-standard auto insurance market. It will also increase the company's presence in Houston, from 13 stores to 22 stores, and expand operations into Beaumont for the first time.

Tim Bienek, the firm's chief financial officer, said that the Affirmative provides insurance to those personal lines customers who are unable to purchase insurance in the standard lines market for a variety of reasons. He also said the new agencies would produce business as typical independent agencies for both Affirmative and other carriers.

The carrier offers products and services in 11 states including Texas, Illinois, California and Florida.