Transverse rated. Targets program fronting & transformation for ILS

Transverse Insurance Group, a new program and fronting carrier that aims to help facilitate access to risk for insurance-linked securities (ILS) funds and investors, has received a preliminary A- rating from A.M. Best.

Transverse Insurance has been in the works for some time, as the experienced team looked to put together a platform that has utility to both traditional and alternative sources of reinsurance capital.

The company describes itself as a property & casualty program carrier, which will provide capacity to managing general agents (MGA’s), distribution networks and other insurance companies.

Transverse’s underwriting platforms have now been rated, with two carrier vehicles established to target different business lines.

Transverse Insurance Company and Transverse Specialty Insurance Company have both been given a Financial Strength Assessment of A- pca (Excellent) and a Long-Term Issuer Credit Assessment of “a-” pca by A.M. Best, who cited a “a preliminary financing structure that projects supportive risk-adjusted capital.”

The two insurance vehicles, which are broadly licensed, will act as fronting and transformation carriers, helping capital providers to access risk, while also helping MGA’s and distributors without capacity access capital providers when required.

As such, rather than just being as one-way conduit for capital to risk, Transverse wants to foster relationships with ILS or alternative reinsurance capacity as well, to help MGA’s and the like channel some of the risk they underwrite to new sources of capital and to access reinsurance providers.

Transverse aims to offer both traditional program fronting relationships, as well as supporting transformer and ILS relationships as well, with risk set to be retained in the carrier on some programs as well.

That’s a little different to some fronting propositions, where little to no risk at all is retained by the fronting carrier.

This could be attractive for ILS participants, looking for access to diversifying sources of business but for who certain areas of the risk and return spectrum are not as suited to their capital.

This might mean that by working with Transverse, ILS players may find they have a front that can also participate alongside them in the risk as well, ensuring the tail or attritional aspects of a program are taken care of.

Transverse Insurance Group, the parent company, is led by co-founder Erik Matson as Chairman and CEO, who has experience across MGA and underwriting focused businesses.

He’s joined by co-founder David Paulsson, an investor with experience allocation to reinsurance sector start-ups, ILS vehicles, and Lloyd’s market access strategies.

Chief Underwriting Officer and Chief Actuary is Ethan Allen, who had worked for AIG for almost 16 years, most recently as Executive Vice President for the AIG Programs division.

Also joining the team is Head of Business Development Shane Haverstick, an experienced reinsurance sector executive who previously worked for Third Point Re and who had been a founder of the Greyhawk fronting start-up in recent years.

Jamie Coleman, Head of Regulatory and Compliance, also worked at the Greyhawk program fronting start-up and has been in the insurance sector around three decades.

It’s also worth noting that Artemis has learned that Alastair Speare-Cole, formerly the CEO of JLT Re, the CUO of Qatar Re, and currently President of Insurance for technology start-up Fractal Industries, is a non-executive director of Transverse.

The seasoned team will be working to develop relationships both with originators of risk and providers of capital, hoping that their business model will provide benefits to both sides.

These program fronting and risk transformation start-ups can act as the conduit for risk and capital, earning their income by helping either side of the deal benefit from efficient risk and capital access, while also making the pathway from originated risk through to ultimate reinsurance capital provider much smoother.

By matching the right risks to the right capital the goal will be to become a business partner that establishes a pipeline between the two, for originators and risk capacity providers, becoming a key piece of the value-chain and helping profitable underwriting and origination teams to grow, while helping capacity providers build their portfolios.