Formation of Homebound Insurance Exchange

HIE Holdings (“HIE”) sponsored the formation of Homebound Insurance Exchange (“Homebound”)

• Homebound is a Texas-domiciled reciprocal insurance carrier that will primarily write low value personal property products
• Key products offered include Homeowners, Dwelling Fire, and Manufactured Home
• Homebound will primarily write in the South Central US
• HIE is a holding company comprised of investments from King Street Capital (“King Street”), ReAlign Insurance Holdings (“ReAlign”), DUAL North America (“DUAL”) and other individual investors

Homebound received an initial $70mm surplus note investment to capitalize its balance sheet and support its future growth

• Capital commitment was led by King Street with ReAlign, DUAL and other individual investors also supporting Homebound

Homebound entered into an Attorney-in-Fact agreement with Homebound Risk Managers, LLC (“HRM”)

• HRM will enter into an MGA agreement with DUAL and manage Homebound’s day-to-day operations and strategy

Homebound will benefit both homeowners and agents by providing new dedicated capital, additional capacity, and coverage options for homeowners at competitive prices

HCMA acted as exclusive transaction advisor and exclusive placement agent in the formation and structuring of Homebound; key roles and responsibilities included:

• Assistance in preparing Homebound’s business plan, financial projections, and regulatory / rating agency materials
• Assistance in reinsurance structuring
• Preparing financial packages and materials for potential investors
• Marketing the transaction to potential investors and facilitating investor discussions
• Structuring the transaction and assistance with negotiation of deal terms & conditions
• Assistance throughout the regulatory approval process

This transaction further solidifies HCMA as the market leader in reciprocal exchange formations

• The successful formation of Homebound represents HCMA’s 10th reciprocal exchange formation since 2017
• In addition, HCMA has completed many other M&A and capital raising transactions involving reciprocal exchanges