Balance Partners has launched its eighth in-house program with a professional liability offering called Maven and added a third MGA partner to its Balance Administrative Services (BP Admin Services) platform in the form of start-up Tuckerman Underwriting as it executes a dual-track strategy, The Insurer can reveal.
The firm, founded by Michael Sillat and Joe Calise, began operating in early 2019 and in its second full year is on course to go past $130mn in premium volume, based on its current pipeline.
Its initial focus was on building in-house programs by attracting entrepreneurial underwriters to launch specialty offerings as partners or employees of Balance Partners. They include railroad liability specialist RailPro+, inland marine-focused Impulse, commercial real estate offering Pentium, wind deductible buy back MGA Mistral, hab package program Aspyre, excess flood insurance program Poseidon and environmental assurance underwriter Steward. But it has also developed a source of fee income from its burgeoning BP Admin Services division.
The approach sees Balance Partners provide services on an outsourcing basis in the form of an entire infrastructure platform to allow underwriting teams to get up and running quickly with market access to capitalise on opportunities, in return for an upfront fee and ongoing commission.
The most notable example was its partnership with Greg Flood’s start-up ATRI Insurance Services as the MGA launched last year with the former Ironshore executive targeting a range of D&O and professional liability classes.
The BP Admin Services division also helped launch third-party MGA Crown Jewel Insurance, a cyber, intellectual property and errors and omissions-focused start-up led by former McGriff executive Mary Guzman.
Tuckerman Underwriting, the most recent addition to the outsourcing roster, is offering primary and excess professional liability insurance, according to managing partner Mark Kawanami Chiu’s LinkedIn profile. Business lines include miscellaneous professional liability, insurance agents and brokers professional liability and architects and engineers professional liability.
Market tailwinds
Speaking to this publication, former WKFC Underwriting CEO Sillat said the MGA platform had been boosted by market tailwinds. “We’re thankful for the timing of course and coming into a hard market with the products we have made the early journey a lot easier. “But we’ve also benefited from a lot of well-known and established distribution relationships we took with us from our combined experience. We now have over 25 underwriters and are drawing significant interest for the programs we are offering,” he said.
Sillat and former Guy Carpenter executive Calise have been able to bring strong insurance and reinsurance carrier relationships to the start-up to create not only a strong panel of capacity providers able to support the growing portfolio of in-house and third-party programs but also in the structuring and placement of facultative placements on larger risks that their underwriters require from time to time.
Balance Partners has two dozen insurers and reinsurers behind its programs. It has utilised domestic carriers – including hybrid fronting companies – and Lloyd’s paper, while reinsurance capacity comes from major European, domestic and Bermudian players.
Calise said the Balance Partners model is already proving successful at attracting top underwriting talent.
“We’ve created a very unique platform that primarily is designed to align the interests of the capacity, the MGA and the individual underwriter and for the latter, our compensation models are solely designed to enrich the underwriters while providing them insurance and reinsurance capacity, distribution, admin services and systems to aid in accomplishing their aspirations. “For those underwriters that have become tired of the traditional brick and mortar insurance company this is an entrepreneurial environment with a formulaic remuneration structure that takes subjectivity out of the equation,” he suggested. He added that reinsurance relationships had been critical to gaining early traction at Balance Partners as it launched de novo programs.
Inner circle
Commenting on the BP Admin Services strategy, Calise said that Balance Partners is also open to the possibility that its relationships with third-party MGAs on the platform could evolve towards potential mergers or acquisitions. Sillat added: “Over time our belief is that the value proposition that our experienced and tenured operations staff put forward will really resonate with our partners and that it may make sense to combine on a formal basis through acquisition or merger and bring them into the core enterprise.” But for now the executive said the strategy adds an additional revenue stream that to date allows it to partner with third-party MGAs that are not directly competing with core products offered by Balance Partners’ in-house MGA. “I think we’ve created a new niche product with the services product and it’s driving individuals to us and also insurance companies to say to individuals to come and talk to Balance Partners because of the flexibility of our model and how we structure these deals,” he said.
Sillat said that while for now the focus is on organically growing Balance Partners’ core programs, it will consider M&A opportunities as it continues to mature, which would typically be focused on adding smaller boutique MGUs with single line of business focus as bolt-on acquisitions.
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