Gallatin Point Capital and American Family Insurance Group announced that funds managed by Gallatin will invest over $1.25 billion from the attorney-in-fact for a reciprocal insurer set up by American Family in 2020.

The reciprocal, Trusted Resource Underwriters Exchange (TRUE), was established by American Family in 2020 to serve homeowners in storm-prone regions of Florida and other parts of the country.

The $1.25-plus billion will enable TRUE to provide underwriting capacity in Florida at a crucial time, and also allow it to strategically expand its footprint nationally, the joint announcement said.

TRUE will utilize a partnership distribution model both through new and existing partnerships. American Family will remain a minority owner in the attorney-in-fact and continue providing distribution and client services such as claims handling and call center support.

“The regulatory changes in Florida present a unique opportunity for us to contribute to the stability of the market and provide crucial support to homeowners in the region,” said Matthew Botein, co-founder and managing partner of Gallatin Point, in a media statement. “With TRUE’s leadership team, combined with the strength of American Family’s industry expertise and our capital investment, we are confident in the prospect of TRUE supporting homeowners as a fully national insurance company over time.”

Gallatin Point has assembled a seasoned team of insurance industry executives to lead TRUE, including Fabian Fondriest, former American Family Direct president, and former chairman and CEO of Homesite Insurance, as TRUE’s executive chairman, and Tony Scavongelli, former head of Partnerships at American Family, as TRUE’s incoming CEO.

“This partnership reflects American Family’s commitment to providing high-quality insurance options for homeowners nationwide,” said Michael Lorion, president of American Family Direct and Homesite. “The ongoing relationship between American Family and TRUE will enable us to serve more customers in catastrophe-exposed regions.”

The transaction closed Dec. 31, 2023.

Howden Tiger Capital Markets & Advisory served as financial advisor and Kirkland & Ellis LLP served as legal counsel to Gallatin Point. Willkie Farr and Gallagher LLP served as legal counsel to American Family.

Source: Gallatin Point, American Family Insurance Group