Spinnaker Insurance Company has been given an A- (Excellent) financial strength rating and an issuer credit rating of “a-” by A.M. Best as the start-up launched by the ex-Arch Re Ingrey family looks to provide program and fronting services to insurance and reinsurance capital.
In the works for some months, Spinnaker launches with a similar model to well-known program service provider State National, of leveraging managing general agent networks to access risk and enabling capacity to get closer to primary risks through its 45 admitted states licenses.
Spinnaker will focus on writing property catastrophe exposed programs from U.S. homeowners and specialty business lines, as well as providing services to capacity providers seeking to access U.S. primary short-tail business lines as a fronting insurer.
A.M. Best explained that; “The ratings reflect Spinnaker’s strong risk-adjusted capitalization, seasoned team of insurance professionals throughout management and the board of directors, strong underwriting controls and targeted business plan. Partially offsetting these positive rating factors are its limited business profile as a startup operation and potential execution risk in implementing its business plan.”
Led by ex-Arch Reinsurance U.S. and St Paul Re executive David Ingrey as CEO and his brother, ex-Arch Re and E.W Blanch reinsurance underwriter Ken Ingrey as CUO, Spinnaker certainly has the pedigree to make waves.
Targeting the same space that State National has been so successful in, with its strategy of helping re/insurance capital to access primary catastrophe risks more directly including its work with ILS manager Nephila Capital, Spinnaker enters a sector that has received a lot of focus in recent months.
By effectively bridging the insurance and reinsurance value chain, enabling capacity, be that traditional or alternative, to more directly access U.S. property catastrophe risks, fronting providers look set to continue to disintermediate the market, something the Ingrey family will clearly be aware of and see as an opportunity for Spinnaker to take advantage of.
For alternative capital, ILS managers and even institutional investors, working with a fronting provider enables property catastrophe risks to be backed by risk capital while taking a number of pieces out of the value chain. That’s an attractive proposition in a market where insurers have been rationalising and reducing their reinsurance spend.