AmRisc targets further growth with Transverse and GeoVera capacity
Cat-focused MGA AmRisc grew E&S gross written premium (GWP) by 20 percent to $1.2bn last year and is looking to further expand in 2021 supported by new capacity from Transverse and GeoVera, The Insurer can reveal.
As well as top-line growth, AmRisc has delivered improved attritional loss ratios to its carrier partners, dropping from the mid-20s into the mid-teens last year.
The Truist Insurance Holdings subsidiary generated overall GWP of $1.55bn last year, including $340mn of admitted business written on behalf of its American Coastal and Journey carrier partners in Florida.
The admitted portion was up from $300mn in 2019, representing growth of around 13 percent, with overall GWP up from $1.3bn in the prior year.
This publication revealed last week that AmRisc had added new capacity for its national E&S commercial insurance program from fronting carrier Transverse, backed by a panel of reinsurers.
And in an interview with The Insurer the MGA’s CEO Brian Reid confirmed that GeoVera had also been added to the carrier panel for the E&S portfolio effective 1 January.
The combination has allowed AmRisc to increase its overall capacity by just over 10 percent, or $300mn, year over year.
On a probable maximum loss (PML) basis at the 1-in-250-year return period, overall available capacity is now at around $3.3bn, Reid explained.
The executive said that AmRisc had also been able to grow its top line across its portfolio while keeping PML exposure broadly flat.
“Ultimately, we’ve had about a 20 percent improvement overall. Market conditions are a big part of that, but we’ve also optimised parts of our portfolio to make that improvement even greater,” he commented.
Reid said he is confident of continued pricing momentum this year, with average improvement in the 18-20 percent range expected across its portfolio.
Attritional loss ratios slashed
In addition to strong top-line growth in the fast-hardening pricing environment – particularly for E&S business – AmRisc was able to deliver meaningful improvement in its attritional loss ratio to carriers on its capacity panel. Overall the attritional loss ratio improved by about 40 percent in 2020, said Reid.
“This improvement was achieved by changes to the portfolio, such as backing off on certain occupancy classes and strategic focus on attritional loss driver accounts,” he added.
The changes have not seen a reshaping of the portfolio’s geographical footprint, which remains predominantly the Southeast of the US, with Florida its biggest state, followed by Texas, the Carolinas and the rest of the Gulf states.
AmRisc’s overall focus on cat business is also unchanged.
“The big story is that our attritional loss ratio has gone down from upper 20s to the mid-teens,” said Reid, with the measure coming in at just 13 percent so far for 2020 on a calendar-year basis.
“This type of portfolio management is why we are able to retain and gain new capacity. The more profit you deliver to your carriers the more they want to partner with you,” he added.
Significant cat activity has impacted the overall loss ratio in recent years, with the E&S loss ratio at 86 percent for 2018, 39 percent for 2019 and 58 percent last year.
Across E&S and admitted, the loss ratio was 71 percent in 2018, 33 percent for 2019 and 47.6 percent for 2020. “This is significantly lower than the average industry loss ratio,” said Reid.
Reid also stated the combined ratio for 2020 – a year that saw significant windstorm activity in the Southeast – will come in well below 100 percent overall.
Collateral structure
The addition of capacity from Transverse for this year includes the use of a “unique” collateral structure that functions as a risk transfer vehicle.
The collateralised risk vehicle is backed by private investors and is structured to pay out losses, utilising reinsurance from the Transverse-fronted panel, Reid explained.
The Transverse capacity was put together in conjunction with reinsurance intermediary TigerRisk and includes a panel representing a cross section of Bermudian, domestic and European companies.
Adding GeoVera to the panel brings AM Best A rated capacity from the California-based carrier, which writes specialty E&S personal lines property business, with a history as an earthquake insurer.
GeoVera is now led by John Forney as CEO. Forney was previously CEO of United Insurance Holdings, which has had ties with AmRisc following the insurer’s acquisition American Coastal in a deal that closed just under four years ago.
Incumbent carriers on the MGA’s E&S panel include Lloyd’s, Zurich’s Steadfast subsidiary, HDI Global Specialty, AIG’s Lexington, QBE, Axa XL’s Indian Harbor, Scor’s General Security Indemnity Company of Arizona, Old Republic and GeoVera Specialty.
State National’s United Specialty subsidiary is also a paper provider, fronting for Nephila.
AmRisc offerings
AmRisc has a range of offerings targeting segments of the cat-exposed and specialty property insurance market with capacity of up to $300mn per risk for general property and habitational business as well as large accounts and public entity business.
Its general property and habitational offering targets a range of occupancies including real estate, apartments, condo associations, retail, offices, lessor’s risks, self-storage warehouses, hotels, restaurants and other general property classes.
It will entertain total insured value (TIV) of up to $2.5bn per account and can write on a full-value, primary or lead quota share capacity basis. The offering is distributed through its Waypoint wholesale platform, Chronos retail platform, AmRisc online and its Insurisk exclusive facility with sister company CRC.
AmRisc Online is unique in that it is the only no clearance program and external producer facing portal available by the MGA. It is offered to both wholesale and retail channels and targets general property occupancies Texas to the Carolinas up to $7.5mn TIV.
In the large accounts and public entity segments, AmRisc will consider TIV of $5mn to $2.5bn per account, also writing on a full-value, primary or lead quota share basis, through Waypoint, Chronos and Insurisk.
AmRisc targets TIV in the $5mn to $100mn range in the builder’s risk segment, with available coverage of up to $200mn per risk up to a 36-month term on the possibility, distributing through its wholesale and retail broker channels.
In technical risks – industrial and manufacturing, the MGA will consider TIV in the $5mn to $500mn range, writing on a full-value basis with capacity of up to $250mn per risk.
The Truist Insurance Holdings subsidiary also has an admitted product for Florida condo associations written on behalf of United Insurance Holdings’ American Coastal unit, and a force-placed foreclosed program for banks and financial institutions distributed through Waypoint only.
In addition to its segment-focused offerings, AmRisc has peril-specific products including a difference in conditions flood cover targeting a range of commercial properties from shopping centres and offices to apartments and assisted living facilities.
The program can provide up to $100mn per account, writing as a primary layer or excess of the National Flood Insurance Program up to $7.5mn per risk.
Its California quake offering targets real estate, apartments, offices and a range of other occupancies with TIV of up to $250mn per account, with primary or full-value up to $125mn per risk, distributed through Waypoint.
Wellington synergies
AmRisc’s recently acquired Wellington, an MGA underwriting personal lines, will continue to operate on a largely independent basis.
“They do homeowners and we do commercial, they’re mostly admitted and we’re mostly E&S. but as far as being like-minded underwriters, focused on carrier profitability, we’re together in that endeavour and we see many synergies that the two groups can bring to one another,” Reid suggested.
Truist Insurance Holdings confirmed in December it had bought Texas-based Wellington from private equity backer Aquiline and said the firm would retain its name and join forces with AmRisc, with which it shares “a similar entrepreneurial and innovative culture”.
This publication had previously revealed that Aquiline had appointed Evercore to explore a potential sale of Paul Poston-led Wellington.