USIC to open Florida subsidiary

Puerto Rican insurer United Surety & Indemnity (USIC) has gained regulatory approval to open a subsidiary in the state of Florida, where it plans to launch operations in January, local daily El Nuevo Día reported. USIC sees its Florida operation generating premiums of US$8mn in its first year of operation, US$16mn in its second year, and US$22mn in its third year. "We have a strategic alliance with Philadelphia Consolidated Holding Co., a well recognized company that underwrites policies all over the country," USIC chairman Federico Millán was quoted as saying. USIC has already put up US$5mn in capital as part of the start up process. Under the terms of the strategic alliance, USIC of Florida has signed a reinsurance agreement with Philadelphia. "Following the [four hurricanes] in Florida we totally reformatted our business plan and decided to concentrate our efforts on housing products," Millán said. USIC was founded by Antonio Blanes in 1990 and generates premiums of about US$18mn from home insurance and US$7mn from surety bonds. Puerto Rican banks have also been looking to grow on the US mainland as competition heats up in their home market. Puerto Rico's largest banking group Popular (NYSE: BPOP) acquired Californian thrift Quaker City and Florida bank Kislak earlier this year to expand the foot print of its Banco Popular North America unit, which has about 127 branches. In October, R&G Financial Corporation (NYSE: RGF) agreed to buy 18 branches in Florida from SouthTrust Bank (NYSE: SOTR) to augment its existing presence of 15 offices in that market.