National Surety Underwriters (NSU) has raised $11.5 million in funding for the capitalisation of a new special-purpose surety reinsurance captive, the National Fidelity Reinsurance Company (NFRC).
The new captive will be a wholly-owned subsidiary of NSU, and will be licensed through the North Carolina Insurance Department.
NSU, which was previously known as Agency Bonding Captives, has raised $8 million in a structured term loan from i2B Capital, plus $3.5 million from investors.
The funding will also be put towards the merger of McCabe and Independent Corporate Underwriters, a managing general underwriter specialising in surety bonds.
The combined entity will allow NFRC to underwrite and reinsure surety bonds—of up to $2 million per bond, and $4 million in the aggregate, per principal—insured through its partner Clear Blue Insurance Company.
It will continue to be operated by Kevin McCabe, who will be chief underwriting officer of the group, and who has also joined the board of directors of the holding company.
NSU is a privately-owned holding company, underwriting agency and reinsurance captive, headquartered in Philadelphia.
CEO of NSU Rennie Rodriguez said: “Our expertise is building and managing specialty insurance agencies and we see tremendous opportunity for consolidation in a fragmented surety bond industry.”
“Through offering a unique package to contracted surety bond agents and targeted strategic acquisitions, we are building a networked system of top-line surety agents.”
