Fronting
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Highly concentrated, overly leveraged fronts could repeat the Unicover-Reliance story. -
Casualty rates in Q3 rose 6.1% driven by increases in commercial auto, energy and excess liability.
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It is understood the permanent reinsurance capital vehicle is called Highline Re and will sit behind fronting carriers.
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The reductions reflect a mix of programs being handed off and MGAs proactively switching.
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Dealmaking took centerstage, but other discussed topics were growth, talent and capacity.
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The executive is charged with defrauding investors out of nearly $500mn.
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Fronting doesn’t look any better when it’s broken down by segment.
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E&S is most exposed to growth normalization, private credit is hunting P&C and fronting is deadlocked on exits.
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Sources said that Howden Capital Markets is advising the fronting company.
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Reinsurers will not back business indefinitely where loss ratios continue to exceed the industry by a wide margin.
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Cavello Bay Re will provide paper for the MGA’s business written out of Bermuda.
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The legacy player is working to secure its first deal, and could look to expand to US E&S.
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Hagerty Re will now assume 100% of the premium and 100% of the risk.
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Kestrel stock will begin trading on Nasdaq tomorrow under the symbol KG.
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The MGA market now makes up 10% of the overall P&C market.
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The company has reduced its exposure on large commercial auto and property.
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The reinsurer also promoted Ethan Allen to chief program officer.
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The firm acted as the front for Trouvaille Re, the E&S property sidecar for MGA AmRisc.
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The move will enable Hadron to deliver more admitted insurance solutions to clients and policyholders.
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Live since May 2023, the reinsurer has over 40 trading relationships currently.
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The new CEO hints at expansion into MGA markets.
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Consolidation options include fronts merging, competition, larger fronts becoming carriers and fronts being acquired by carriers.
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The company is on target to write around $700mn in premiums this year.
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The change comes after an ownership restructuring.
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The transaction comes after Kestrel explored a deal last quarter to raise ~$150mn of capital.
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The new, publicly listed specialty program group will be led by Luke Ledbetter.
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Fronting growth fell by half in 2024 due to uncertain loss climate and high cost of capital.
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The Bain-backed fronting carrier acquired Spinnaker’s shell subsidiary earlier this year.
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Sources said that the AmTrust-backed fronting carrier has retained Evercore to run the process.
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Capacity conversations centered around comp, trucking and cat, while new names emerged in collateralized re.
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It is understood that the cut programs include Yachtinsure, Rhino, Paramount, Pinpoint and NTA.
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Milton and Helene, casualty reserves and growth will be some of this year’s topics.
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The raise includes minority investments from Nationwide, Enstar and others.
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The move comes amid improving conditions in the IPO market for insurance companies.
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Balance sheet risk, limited synergies and a further restriction of exit options all tell against a roll-up playbook.
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Negotiations come after Insurance Insider US revealed that the Bermudian was running an auction.
