HSCM Bermuda recapitalises fronting insurer for auto insurtech Buckle

HSCM Bermuda Management Company, the insurance and reinsurance investment business entity of asset manager Hudson Structured Capital Management Ltd., has recapitalised an auto insurer to support the expansion of ride share and sharing economy focused insurtech Buckle.

Buckle is a provider of technology-driven financial products and services to the shared economy, with insurance for ride sharing drivers its key product offering at the moment.

In particular, Buckle has a relationship with ride share app company Lyft and its insurance policies are backed by reinsurance capital from global giant Munich Re and also reinsurance capacity channelled by fronting player Clear Blue Insurance.

Buckle has acquired auto insurer Gateway Insurance Company (Gateway), including its 47 state insurance licenses. Gateway had previously been a subsidiary of Atlas Financial Holdings, Inc. (Atlas) and had been providing commercial auto coverage.

Buckle’s plan is to utilise Gateway as a fronting carrier it seems, to support policies sold via Atlas’ wholly owned managing general agency, Anchor Group Management, Inc. (AGMI). The products will include insurance for rideshare drivers, as well as delivery drivers, plus full-time taxi operators and other sharing economy automotive insurance use-cases.

Hudson Structured Capital Management, the insurance-linked securities (ILS), reinsurance and transportation focused asset manager, has provided assistance by recapitalising Gateway, as its HSCM Bermuda entity put investor client funds to work in supporting the financing of the licensed fronting carrier.

“We believe this deal is a win-win for both TNCs and independent contractor drivers,” explained Marty Young, co-founder of Buckle. “As this partnership drives down the costs of insurance, we are excited to continue advancing our goal of providing well-deserved support to the mobility ecosystem. Every time Buckle sells a policy, its TNC partner’s balance sheet improves as risk is moved from the TNC to the independent contractors.”

Gateway Insurance, with its licenses to sell policies across most of the United States, can help Buckle get its products out much more broadly, while also ensuring the costs of coverage can be kept lower with less mouths to feed in the chain.

In addition, the reinsurance capital supporting Buckle’s policies also benefits, through the efficiencies gained by Buckle owning its own fronting carrier and with its recapitalisation having come from the capital markets thanks to HSCM Bermuda’s participation.

Buckle isn’t the first insurtech to acquire its own insurance carrier. Just recently insurtech Hippo acquired fronting specialist  Spinnaker.