Firm to move into three more states
Baton Rouge-based 1347 Property Insurance Holdings, which specializes in homeowner’s coverage, plans to raise $20.3 million through a stock issue and use that money to expand to Florida, Texas and Hawaii.
1347, through its subsidiary Maison Insurance Co., sells homeowner’s and wind-and-hail only coverage in Louisiana. But the company’s growth strategy includes offering wind-only coverage and homeowner’s policies in coastal states where the company’s expertise is easily transferable.
1347 plans to use about $17 million from the stock sale to form a subsidiary or subsidiaries that will sell coverage in Florida, Texas and Hawaii.
1347 picked up roughly 6,000 policies from Louisiana Citizens Property Insurance Corp., the state’s property insurer of last resort. Similar opportunities are available in Florida, whose Citizens Property Insurance Corp. is now the state’s largest insurer with more than 900,000 policies.
In its prospectus, 1347 says it would look for partnerships to accelerate growth in Hawaii and Texas. Hawaii was last struck by a hurricane in 1992, and that storm hit only one of the islands.
In Louisiana, 1347’s goal is to capture between 2 percent and 3 percent of the market by 2017.
Roughly $3.3 million will be used for general corporate purposes, such as business development, sales and marketing, and working capital.
The company went public on March 31, netting $15.1 million from its initial public offering. The second stock issue could net as much as $23.4 million because underwriters could issue an additional 375,000 shares if the demand is high. The projections are based on a share price of $8.81.
1347 said it expects to close the sale on June 13.
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