By David Bull

April 24 - (The Insurer) - Newly independent United Risk is now a top five MGA platform globally and is targeting expansion of its existing offerings along with a pipeline of new programs, according to Applied Underwriters president Jamie Sahara.

Speaking to Program Manager following the news earlier this week that United Risk has been spun off from Applied Underwriters, Sahara said the plan had always been to separate the platform after it was unveiled in November 2023.

“Often when you think of a spinoff you also think of some tangled-up transformation because you’re trying to divide an existing enterprise. In this case, United Risk was incubated within the resources of the affiliated greater organisation with the intention, from the beginning, of it being separate.

“It’s been built from the ground up to be a separate entity, and now it’s time for it to stand on its own,” he commented.

United Risk houses the multibillion-dollar MGA and MGU businesses that Omaha, Nebraska-based Applied Underwriters has been building with the recruitment of high-profile underwriting executives, largely from insurance carriers in the U.S. and internationally, in recent years.

Its 28 different MGA and MGU programs span more than 30 offices around the world, including New York and Paris, and are staffed by more than 250 insurance professionals.

“The company is getting big. The programs themselves are growing, and there are new programs in the hopper. In several segments we are among the top underwriters in the market. By our own estimates, we are today among the top five MGA platforms in the world,” said Sahara.

He added that as private, closely held companies, Applied Underwriters and United Risk are able to operate differently from public company insurers and the pressures they face.

“We have a clear vision which we all work towards with complete clarity. For United Risk, we’ve been able to rally the best talent in the business around that vision to make United Risk rapidly one of the biggest, best and most valuable MGA platforms in the world,” Sahara commented.

The executive said that United Risk has a very specific profile when it comes to launching new programs.

The CEO running the individual program has to be an “accomplished career insurance underwriter and corporate executive who is at the top of their game”.

“Our program book is a ‘who’s who’ of the business. We are almost entirely specialty commercial focused. From there our underlying insureds are in a broad range of lines and industries. Our new programs often start with existing books of business. Market cycles can be important, and some of the programs are predicated on a hard market,” he commented.

United Risk is focused on providing E&S products in the current phase of the underwriting cycle, which has seen the non-admitted market almost double in size as admitted carriers have retrenched.

With a few exceptions where admitted coverage is provided to retail distribution, its programs are distributed through exclusive wholesalers.

Sahara described the platform’s operational units as traditional and structured around desk underwriters, with technology employed where it makes sense to enhance efficiencies and make United Risk more competitive in areas such as turnaround time for quotes.

“(The) bigger picture (is) we are looking for strong earnings and a strong group of programs diversified in all regards: by fronting carriers, reinsurance relations, distribution sources and lines of business. We push our managers hard on all of these issues,” he commented.

NON-TRADITIONAL ARCHITECTURE

Asked about the working relationship between Applied Underwriters, United Risk and other affiliated units following the spinoff of the MGA platform, Sahara highlighted its “non-traditional architecture” and said that the entities operate very differently from “corporate America”.

“To understand our organisation, first, you should recognise that our ownership is closely held by entrepreneurs who are founders and intend to be running things for a very long time to come. Second, our strategic plans are carefully thought out and focused on producing long-long-term value for all of our shareholders,” he explained.

He pointed to a “dynamic work environment” which is based on clarity and trust as a draw for top-tier talent and interesting M&A deals.

The organisation was founded upon flexibility and nimbleness, said Sahara, which enables it to be the “ultimate cycle manager”, not just for coverage-specific insurance and reinsurance cycles, but also in unlocking the “embedded value” of the integrated insurance conglomerate.

“That could mean monetising a service-business cash flow. It could mean accumulating earnings through an underwriting advantage. It all depends on the marketplace opportunities at the time,” he added.

The ownership structure of the groups within the overall organisation includes dozens of minority partners, with United Risk and carrier subsidiary North American Casualty held together by strategic partnership agreements.

The organisation has not sought to vertically integrate, with leadership and decision-making pushed down as far as possible, and leadership at the top intergroup level focused on “big picture” issues such as setting standards, government affairs, PR, advertising, economic strategy and risk accumulations.

“We’re very good at telling our managers what’s to be done strategically and setting meaningful incentives. Then we’re equally very good at leaving our managers alone to get the job done. This is why we’re able to incubate an organisation like United Risk in such a short period of time,” said Sahara.

United Risk’s practices include Applied Entertainment & Sports, Applied Financial Lines, Applied Fine Art & Collections, Applied Specialty Underwriters, Applied Surety Underwriters, Applied Underwriters Aerospace, Applied Underwriters Aviation, Applied Warranty & Insurance Services, Blue Ridge Specialty and Concept Special Risks.

There are also several MGAs and programs under the Rivington brand, including in commercial auto, environmental and middle market property.

As previously reported, United Risk is in the process of launching a reinsurance MGA led by Jay Cahill, whose previous role as CFO of the platform has been taken by former Herbalife CFO Alex Amezquita.

Sahara said the move into reinsurance is an example of its approach to cycle management, as he also highlighted its retrenchment from personal lines, including exiting admitted homeowners.