Flux 1985 offers investors a direct route to high-quality risk: Acrisure’s Millwater

Acrisure, the expansive and technology focused insurance and reinsurance broking group, has launched a new syndicate at Lloyd’s, which the company says represents a direct route for investors to access high-quality risk from that marketplace.

Alongside Asta, the third-party managing agent at Lloyd’s, Acrisure said today that Lloyd’s has granted ‘in principle’ approval for the launch of Flux syndicate 1985, with the new entity to start underwriting on January 1st 2023.

Importantly, Flux is expected to bring new business to Lloyd’s, of which 70% is thought not to have been ceded into that market before.

That’s interesting, as many recent Lloyd’s initiatives and ventures have been about accessing the existing portfolio of business in that market, where as this is about leveraging the Lloyd’s infrastructure to channel new business to capital in an efficient way, a clear growth opportunity for Acrisure.

Of course, Acrisure is also largely known as a broking group, rather than underwriter, but in this venture it does appear to be marshalling capital to match with risks, a little like the facilities ventures we’ve seen from other brokers.

Flux syndicate 1985 is expected to generate gross written premium of £106.7 million in 2023, which is a strong start.

Adopting a low-touch underwriting model, Flux will take the best Lloyd’s products to new buyers through Acrisure’s technology-driven retail distribution systems, the launch announcement states.

It’s also expected to grow consortia opportunities for other Lloyd’s syndicates, by making it easier for them to access the Acrisure retail network.

Grahame Millwater, Acrisure’s president of global insurance, hinted at the possibility and the fact the model will provide efficient access to risk-linked returns for investors.

“The global insurance market is experiencing a growing convergence between underwriting, distribution, and capital. The Flux syndicate offers investors access to high-quality risk from multiple sources via the most direct route possible,” Millwater explained.

He added that, “We looked at Lloyd’s efforts to make the market more accessible, and easy to use, and we like what we have seen.

“With the help of Asta, we’ve created a leading-edge business model which will harness those facilities to the benefit of everyone in the chain, from the insured customer all the way to the ultimate capital provider.”

Lorraine Harfitt, Asta chief executive officer, added, “The Flux opportunity has considerable potential to attract accretive business into Lloyd’s. Of about $32 billion in premium currently managed by Acrisure, only about $400 million currently flows into Lloyd’s.

“The launch of Flux stands to increase that ratio dramatically and bring a large volume of new risk and premium into the market.

“It will accrue not just to Flux, but to other syndicates as well and will also provide additional opportunities for third-party capital.

“We’re proud to provide third party syndicate management to this exciting venture, which constitutes a ringing endorsement of Lloyd’s initiatives to make the market more attractive to high-quality, low-expense, entrepreneurial insurance players seeking an efficient platform for growth.”