Nephila’s MGA Velocity expanding homeowners writing in Florida & Texas

Velocity Risk Underwriters LLC, the managing general agency (MGA) operation of reinsurance, catastrophe, climate and weather risk-linked investment manager Nephila Capital, is to expand its direct sourcing of homeowners business in the core wind-exposed coastal insurance markets of Florida and Texas.

Velocity has been steadily expanding its operations as an MGA, selling homeowners and commercial insurance policies in a growing number of U.S. states.

Today’s announcement sees a new product launched, named Velocity Flex Home™ for which the company received a trademark in the last month or so.

As with the other insurance products Velocity underwrites, Flex Home will provide catastrophe focused property replacement coverage largely in wind and earthquake exposed regions, as well as other areas where specific peril catastrophe exposure is deemed high.

Supported by reinsurance underwriting capital from the Nephila Capital insurance-linked securities (ILS) funds, the policies Velocity writes on behalf of customers are considered as secure as you can get given the fully collateralised nature of the reinsurance underpinning them.

Velocity Flex Home expands the range of home insurance products the MGA offers in Texas and Florida.

It will be offered as an additional homeowners product in the two states, providing Velocity appointed agents with the ability to underwrite in expanded coastal areas, the company said.

The new program will be underwritten through Independent Specialty Insurance Company, an A.M. Best “A” rated non-admitted carrier that is part of Nephila’s Markel stable-mate, program fronting specialist State National Insurance Group.

“We are excited to add this new product to our list of existing products,” explained Jen Kowalski, VP Personal Lines Sales at Velocity Risk Underwriters. “Our agents will have access to a fully automated quote and bind system and can offer coverage up to $3 million in replacement cost coverage for homes, especially in areas where coastal customers have difficulty in securing coverage.”

Nephila Capital leverages the Velocity MGA platform as an intermediary to source portfolios of catastrophe exposed insurance business, which can then be backed by reinsurance capital managed by the investment manager in its ILS funds.

Nephila often works with other insurance capital providers that can take out much of the volatility in the portfolios of primary insurance risk, it is the property catastrophe exposed component of these primary insurance risks that Nephila targets to generate a return on for its investors.

The expansion has been steady at Velocity, with a focus largely on underwriting in regions that are catastrophe exposed.

Last year the company added North Carolina and New York coastal regions, another source of U.S. wind exposed property risk, following that up with the addition of New Jersey as well.

As well as sourcing and being a conduit to catastrophe risk for the Nephila Capital ILS funds, Velocity through its advanced technology and claims infrastructure also seeks to improve the performance of a portfolio of catastrophe exposed primary property risks, which in turn helps to improve the return profile of the portfolios of risk for Nephila’s investors.