Chronicle Journal: Finance

Atlas Financial Holdings Announces Letter of Intent for Sale of American Country and American Service Insurance Companies to Ride-Sharing Insurance Provider Buckle; Continues MGA Strategy with Expense Reduction

Atlas Financial Holdings, Inc. (NASDAQ: AFH) (“Atlas” or the “Company”) today announced the execution of a non-binding letter of intent (“LOI”) among the Company’s subsidiary American Insurance Acquisition, Inc. (“AIAI”), Buckle Corp (“Buckle”) and the statutory rehabilitator (“Rehabilitator”) of the Company’s indirect subsidiaries American Country Insurance Company (“American Country”) and American Service Insurance Company, Inc. (“American Service”) for the acquisition by Buckle of the stock, charters and state licenses of American Country and American Service in a collaborative transaction described further below, as an important continuation of Atlas’ strategic plan. Buckle is a technology-driven financial services company that previously acquired the stock, charter and state licenses of Gateway Insurance Company (“Gateway”), which was an indirect wholly owned subsidiary of the Company and, Buckle’s core business focuses on part-time transportation network company (“TNC”) drivers and is complementary to Atlas’ focus on full-time drivers in the Livery, Paratransit, Taxi and TNC segments.

As previously announced, Atlas’ strategic focus includes transitioning business previously written on its wholly owned insurance subsidiaries, which are currently in rehabilitation, to alternative markets through the Company’s wholly owned managing general agency (“MGA”), Anchor Group Management, Inc. (“AGMI”), to leverage the team, distribution systems and other resources aligned under this business unit.

This agreement includes the following components:

  • The LOI contemplates a transaction pursuant to which Buckle will acquire the stock of Atlas’ indirect subsidiaries American Country and American Service, and their corporate charters and sixty-four (64) state insurance licenses, subject to regulatory and other necessary approvals, for up to $5.12 million based on the number of unrestricted licenses at closing, such amount to be paid for the benefit of the estates of American Country and American Service, with an anticipated closing date in the second half of 2020.
  • The Rehabilitator has agreed to pay up to $25,000 out of the proceeds of the transaction for AIAI’s legal fees.
  • The Buckle transaction will not include any transfer of American Country or American Service insured obligations; such obligations will remain in the receiverships estates of American Country and American Service.
  • Subsequent to closing, Buckle plans to recapitalize American Country and American Service in addition to Gateway and utilize the recapitalized American Country, American Service, and Gateway (collectively “the ASI Pool Companies”) to support the writing of new and renewal insurance policies, including non-paratransit policies for AGMI.
  • AGMI is actively transitioning the entirety of Atlas’ expiring taxi, livery and other non-paratransit business from its pool of subsidiaries including the ASI Pool Companies to recapitalized Gateway under an underwriting management agreement. The addition of American Service and American Country is expected to expand the scope of opportunities to generate business via this arrangement in the future.
  • AGMI continues to transition its paratransit business to National Interstate under the previously disclosed, and recently extended, underwriting agreement.
  • Atlas’ subsidiaries will continue to provide professional services to Buckle consistent with those currently being provided for Gateway on a post-closing basis under one or more service agreements which are subject to negotiation and any required regulatory approvals.

In connection with the anticipated Buckle transaction, the Boards of Directors of AIAI and American Service have consented to American Country and American Service being placed into liquidation which the Company expects to happen in the near term.

The Company is also taking steps to reduce expenses as part of its transition to a MGA. As a result of COVID-19 and the issues related to the insurance subsidiaries’ rehabilitation, the number of vehicles covered by insurance in force and their time on the road within its target market is currently significantly less than what it would have otherwise expected it to be. While it continues to be very difficult to forecast expected future premium volumes, the Company is taking necessary steps to align the scale of its operations with anticipated workloads and revenue. The Company is implementing expense reductions, including a 30% - 40% reduction in staffing through a combination of layoffs and furloughs, within the next 60 days. The majority of planned headcount reduction relates to functions traditionally necessary to support the Company’s insurance carrier subsidiaries. Other steps have already been taken to reduce other operating expenses.

Management Commentary

Scott D. Wollney, President & CEO of Atlas, stated, “The relationship with Buckle has been very constructive thus far and we see a number of synergies and incremental opportunities to work together as partners. Despite the challenges we all face in light of COVID-19 and the impact it is having on demand for insurance in the commercial auto space, continuing to make progress with strategic activities like this will best position us to optimize opportunities in the future when economic recovery begins. We are very proud of our Team and their ability to support one another, our customers and business partners. As a smaller organization in the near-term, Atlas intends to focus on generating positive EBITDA from our MGA operation and best positioning the operation for future success.”

The LOI is non-binding and subject to negotiation of definitive agreements. Therefore, there can be no assurance that the transaction will be consummated on the terms described herein or at all. In addition, the transaction will be subject to court approval and may be subject to a bid process established by the Rehabilitator and approved by the court. The description of the LOI contained herein is a summary only. The terms of the LOI and any bid process will be made publicly available by the Rehabilitator, or if proceedings for the liquidation referred to above are commenced, the statutory liquidator of American Country and American Service. Assuming the successful consummation of the transaction, Atlas and Buckle plan to continue to explore other potential opportunities to build on this partnership.

All remaining in-force American Country and American Service policies are expected to be canceled with thirty days’ notice following the date of liquidation, unless the policy term of the policy has an earlier expiration date or the insured has replaced the policy prior to that date and time. The Company expects AGMI to provide alternative quotes for all accounts that meet underwriting guidelines.

About Buckle

Buckle provides technology-driven financial products and services to the shared economy. When delivering insurance, the company’s goal is to offer streamlined and transparent transactions to those who turn their personal assets into revenue-driving opportunities. For more information on Buckle, visit and connect on Facebook and LinkedIn.

About Atlas

The primary business of Atlas is commercial automobile insurance in the United States, with a niche market orientation and focus on insurance for the “light” commercial automobile sector including taxi cabs, non-emergency para-transit, limousine/livery (including full-time transportation network company drivers) and business auto. The Company’s strategy is focused on leveraging its managing general agency operation (“AGMI”) and its insuretech digital platform (“optOn”). For more information about Atlas, please visit,, and

Forward-Looking Statements

This release includes forward-looking statements regarding Atlas and its insurance subsidiaries and businesses. Such statements are based on the current expectations of the management of each entity. The words “anticipate,” “expect,” “believe,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or similar words are used to identify such forward looking information. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including risks regarding the effects and duration of the COVID-19 outbreak, the insurance industry, economic factors and the equity markets generally and the risk factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent periodic reports. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Atlas and its subsidiaries undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.


At the Company
Atlas Financial Holdings, Inc.
Scott Wollney, CEO

Investor Relations
The Equity Group Inc.
Adam Prior, Senior Vice President

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