FedNat agrees cooperation deal with activist investor Capital Returns

US insurer FedNat has entered into a "cooperation agreement" with its third largest shareholder Capital Returns Management in response to legal proceedings filed by the activist investor, and agreed to add two new directors to its board as part of the deal.

The board of FedNat Holding Company has appointed David Michelson and David Patterson to serve as new independent directors. Both the executives have been designated as board observers with immediate effect while their appointments as directors receive regulatory review.

Michelson is a 26-year veteran of publicly traded specialty property and casualty insurer National Interstate Corporation, where he served as president and chief executive officer from 2008 until 2016. He also served as a director of National Interstate from 2009 until 2016.

Patterson has more than 40 years of operational and executive leadership experience in the property and casualty insurance industry. Most recently, he served as president and chairman of ESIS, the risk management services subsidiary of Ace (now Chubb) from 2004 to 2015.

In addition, the company announced that it will hold an annual shareholder meeting on October 17, 2019.

“FedNat has always believed in maintaining collaborative dialogue with all of our shareholders, including Capital Returns and its President, Ronald Bobman, and appreciates their insights, viewpoints and assistance in identifying Michelson and vetting these exceptional candidates to join the Board,” said Michael Braun, FedNat chief executive officer.

“I echo Bruce’s sentiment on our new Board candidates and look forward to working with them as we execute on FedNat’s strategy to drive profitable growth and value creation for our shareholders.”

Bobman commented: “We appreciate the constructive dialogue with FedNat’s management and Board and are pleased to see the Company strengthen its Board. We believe these two new directors will help FedNat continue building value for shareholders.”

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