State National Companies
| Company type | Public |
|---|---|
| Industry | Property and casualty insurance |
| Founded | 1973 |
| Founder | Garry Ledbetter, Terry Ledbetter, Lonnie Ledbetter |
| Headquarters | United States |
Area served | United States (all 50 states and the District of Columbia) |
Key people | Terry Ledbetter (CEO, President, Chairman), Matthew Freeman (President as of 2016) |
| Products | Collateral Protection Insurance, general liability, commercial liability, commercial multi-peril, property, workers compensation coverage |
| Parent | Markel Corporation (acquisition announced 2017) |
State National Companies, Inc. specializes in property and casualty insurance, concentrating on two primary segments: Program Services and Lender Services. The firm holds licenses across all 50 states and the District of Columbia.
Company history
The company was established in 1973 by brothers Garry, Terry, and Lonnie Ledbetter initially as a general agency focused on selling Collateral Protection Insurance (CPI) within Texas. By the late 1970s, the business expanded its operations beyond Texas borders.
In 1984, State National Insurance Company (SNIC) was created to directly underwrite CPI policies. SNIC achieved an “A” (Excellent) rating from A. M. Best in 1993 and has consistently maintained this rating since then.
State National acquired National Specialty Insurance Company (NSIC) in 1999, which originally held licenses in 21 states before extending coverage nationwide. The company launched United Specialty Insurance Company (USIC) in 2006 to handle excess and surplus lines. Together with City National Insurance Company and Independent Specialty Insurance Company, these subsidiaries constitute the State National Group.
Leadership transitioned in 2014 when Terry Ledbetter assumed the roles of CEO, President, and chairman following Lonnie Ledbetter’s retirement. On November 3, 2014, the company began trading on the NASDAQ Global Select Market under the ticker SNC. Terry Ledbetter was recognized on the IBA Hot 100 list in 2015. In February 2016, Matthew Freeman was named President while Terry continued as CEO and chairman.
On July 26, 2017, Markel Corp. announced its intent to acquire State National Companies for $919 million to broaden its underwriting portfolio and diversify revenue sources. The transaction received unanimous approval from both companies’ boards and was anticipated to finalize in the fourth quarter of 2017.
Divisions
State National Companies conducts its business through two main divisions: Program Services and Lender Services.
Program Services
The Program Services division facilitates access to the U.S. property and casualty insurance marketplace by charging a ceding fee. It primarily serves specialty general agents (GAs) and insurance producers who manage portfolios backed by third-party reinsurers, domestic and international insurers, as well as institutional risk investors aiming for entry into specific U.S. property and casualty lines. This segment also supports insurers requiring “A”-rated paper following rating downgrades, exemplified by Meadowbrook Insurance’s 2013 arrangement with State National Insurance Co. to offer “A” rated policies.
State National delivers licensing across all states through three admitted carriers—State National Insurance Company, National Specialty Insurance Company, and City National Insurance Company—and two excess and surplus lines carriers: United Specialty Insurance Company and Independent Specialty Insurance Company. The company holds an “A” (Excellent) rating from A.M. Best with a Financial Size Category of IX. Through these carriers, clients issue a range of insurance products including general liability, commercial liability, commercial multi-peril, property, and workers compensation coverage. State National reinsures nearly all underwriting and operational risks connected with its issuing carrier agreements.
Lender Services
The Lender Services division at State National delivers portfolio protection solutions, including Collateral Protection Insurance (CPI), which safeguards vehicles used as loan collateral by banks, credit unions, and specialty finance firms. The company predominantly targets financial institutions directly, with agents contributing minimally to sales efforts.
Portfolio protection is utilized by lenders to cover vehicles when borrowers neglect to maintain the necessary insurance coverage. State National oversees the entire insurance process encompassing sales, marketing, policy issuance, administration, underwriting, and claims management.
Customer support is facilitated through InsurTrak, State National’s proprietary platform designed for monitoring and administering CPI programs.
In 2009, State National established an exclusive collaboration with CUNA Mutual to offer collateral protection insurance specifically to the credit union market. This partnership led to the company’s most significant annual growth within that segment. The agreement was extended in June 2014 to remain effective through July 2018.