US based property and casualty insurer Tower Group has acquired a miniority stake of 8.5% in Cinium Financial Services for $7m in the form of convertible senior notes, which are due in 2026.
The underwriter said that the recent investment highlights its commitment to expand into the surety market with an experienced niche underwriter.
Exressing his views on the recent transcation, Tower president and CEO Michael Lee said, "We have worked with the Cinium team over the past two years, and have been impressed with their innovative approach to the surety and bonding market. We are pleased with this opportunity to make a strategic investment in Cinium and further expand our presence in the surety line of business."
Tower started a program underwriting agreement with Cinium Underwriter Services Group in February this year, under which Cinium started underwriting business on behalf of Tower in 43 states and the District of Columbia, US.
Cinium Financial Services offers traditional commercial surety bonds to the millions of the US businesses that are required to post a bond under the terms of their licenses.
Tower through its insurance services subsidiaries offers underwriting, claims administration, operational and technology services for other insurance companies.
