Hallmark Financial Mulls Separation Of Specialty Commercial Business

Currently, the segments of Hallmark’s specialty commercial unit each operate under a unique business model, utilize their own distribution channels, and have a different return profile.

Hallmark’s board is of the belief that establishing two separate companies might “achieve a more appropriate aggregate valuation and improve access to capital,” a company release said.

The specialty commercial segment of Hallmark represents 75% of the company’s gross premium written, and 68% of its net premium written through the first three quarters of 2020. The business has also experienced considerable rate increases over the past 12 quarters, from about 7% to over 20% in Q3 2020.

No final decision has been made regarding the structure of the standalone specialty commercial company, Hallmark said. The transaction will also be subject to conditions and approvals of the board of directors, as well as regulatory approvals.