3 Things – Distribution / Capacity Solutions, Main Street / FCCI Focus & Leading with Strategic Investments

Hi Friends! We are back after taking a break over the Labor Day holiday, we hope it was enjoyable for everyone. This past week was short but busy and featured impactful headlines that continue to highlight the on-going themes shaping insurance. For this week’s edition, we are following innovative distribution and capacity solutions, with a continued focus on shedding personal lines to focus on commercial and specialty opportunities. MGA operations and other acquisitions fueled by private equity ventures concentrate on growth and specialization. Let’s dive in and explore the three things we learned this week.

Innovative Distribution and Capacity Solutions

Insurtechs players continue to evolve and adapt as they find their footing and explore new markets and distribution channels. As with most things in life, experience helps illuminate the path forward for these entities as they look to expand and grow.

Root Insurance has been particularly focused on expanding its distribution network by forming critical partnerships with tech-driven companies. They teamed up with agent platform Goosehead Insurance to integrate its quote delivery system with Goosehead’s Quote to Issue platform. Similarly, Root has partnered with fellow public insurtech Hippo, integrating into their First Connect platform to offer API-powered quote and bind capabilities. Both partnerships demonstrate Root’s focus on leveraging technology to drive profitable growth through diversified distribution channels.

SageSure, a tech-enabled MGA focused on homeowners’ insurance, has partnered with Markel. This collaboration will enhance SageSure’s market capacity in challenging coastal areas and high-risk regions across the U.S. Markel’s strong balance sheet will provide stable capacity support, enabling SageSure to offer more robust coverage and meet increasing demand for homeowners’ insurance in difficult-to-insure markets.

SiriusPoint has partnered with Gigasure, a travel insurtech company, to expand its presence in the travel insurance market. This collaboration will leverage Gigasure’s technology and expertise to offer travelers innovative and flexible insurance solutions. The partnership is part of SiriusPoint’s broader strategy to support insurtech ventures and expand its digital offerings.

Main Street & FCCI Focus on Commercial / Specialty Lines

Traditional carriers continue to pull back from personal lines to sharpen their focus on commercial offerings while also opening opportunities to write business in the E&S market. These moves underscore the demand for flexible, specialized coverage in high-risk sectors and demonstrate the opportunity to specialize in commercial and specialty lines that continue to be a future-forward strategy for insurers.

Main Street America Insurance announced its decision to discontinue offering personal lines insurance and focus solely on commercial lines. The insurer, part of American Family Insurance, aims to capitalize on opportunities in commercial lines. The company sees significant growth potential in this area, particularly through the independent agent channel. This shift aligns with its strategy to innovate and better serve small business owners’ needs.

FCCI Insurance Group has introduced FCCI Specialty Insurance Company, marking a new chapter in providing excess and surplus solutions. The launch aims to address the growing demand for specialized coverage in complex and high-risk markets. With this new venture, FCCI will expand its reach and offer more flexible insurance products to meet the needs of businesses in challenging sectors.

Ryan Specialty, Bishop Street, and WTW Lead with Strategic Investments

Ryan Specialty announced they have agreed to acquire Ethos Specialty Insurance, the MGU business unit, from Ascot Group. Ascot has been shopping the Ethos since last fall and will benefit from the strong valuations that persist in the market to sharpen its focus on core insurance businesses. Meanwhile, this acquisition is part of Ryan Specialty’s strategy to enhance its capabilities in the specialty insurance sector, further expanding its portfolio to include a specialty underwriting vehicle alongside its leading wholesale distribution capabilities.

Private-equity-backed, Bishop Street Underwriters had a busy week with two significant announcements. First, a joint venture with Skyward Specialty Insurance aimed at expanding their reach in the specialty insurance market. And second, an acquisition of Conifer Insurance Services, expanding its portfolio of MGAs and strengthening its position in the specialty insurance market. This move is part of Bishop Street’s broader growth strategy aimed at acquiring MGAs and recruiting specialty underwriting teams.

In other news, Moody’s acquired Praedicat, a company specializing in casualty liability modeling, to enhance its capabilities. The acquisition will allow Moody’s to assess better and manage complex risks related to casualty liabilities. Praedicat’s advanced data and analytics will bolster Moody’s risk modeling, helping clients navigate emerging risks and improve decision-making.

Finally, according to an exclusive report by The Insurer, WTW is reportedly close to re-entering the reinsurance market through a partnership with private equity firm Bain Capital. The venture would mark WTW’s return after selling Willis Re to Gallagher due to anti-trust concerns. The new business model will likely involve WTW holding a minority stake and “renting” its brand, leveraging its book of business and analytics capabilities.

Join us as we continue to explore the headlines and news shaping the insurance sector, and stay tuned for more insights on the unfolding narrative of our industry!  Stay productive, stay safe and stay in touch!