Specialist excess & surplus (E&S) insurer, Orchid Underwriters, LLC is to roll out new admitted coastal residential homeowners’ solutions via a new partnership with program and fronting specialist, Spinnaker Insurance Company.
A managing general agent (MGA), Orchid specialises in underwriting E&S insurance focusing on coastal properties, and recently announced the launch of a new set of admitted residential homeowners’ insurance products in Alabama, via A.M. Best rated property & casualty insurer, Spinnaker.
Launched in 2015, Spinnaker focuses on writing property catastrophe exposed programs from U.S. homeowners and specialty business lines. This approach, which has been so successful for State National Companies, effectively jumps the insurance and reinsurance value chain by enabling traditional, and capital market investor or insurance-linked securities (ILS) capacity to more directly access U.S. catastrophe risks.
The new partnership will see Orchid initially offer Spinnaker cover in Alabama from early March, 2017, with a view to strategically grow into other parts of the U.S. throughout the coming months and year.
“I am excited about this new Spinnaker partnership as the Alabama product launch represents the first step in a multi-state strategy of diversifying our product suite by adding admitted homeowner solutions on our proprietary platform. This will also strengthen our value proposition with existing retail partners that are in need of A- Best-rated homeowner companies writing in coastal areas,” said Brad Emmons, President of Orchid.
Orchid states that the new rollout sets it apart from its competitors as it’s now one of just a few MGAs that offer E&S and admitted solutions with an A.M. Best A rating. Initially, the new product will be introduced to Orchid’s existing agent base, likely with a view to expand this over time.
David Ingrey, Chief Executive Officer (CEO) of Spinnaker, said; “The Orchid team has a long track record of providing excellent service and underwriting expertise. We are pleased to be able to leverage their platform and experience in Alabama and beyond.”
For Spinnaker, the partnership enables the program and fronting specialist to grow its presence across the U.S., similar to its arrangement with Acadian Managers in 2016, which enabled it access to Louisiana business.
ILS fund managers are increasingly keen to work with rated fronting providers, helping them to move their capital higher up the risk value chain in order to increase efficiency and have a more direct access to risk.
We understand that Spinnaker has had discussions with a number of capital market capacity providers, although details of who (if any) the company is working with have yet to emerge.