This is a positive move in a year when insurance ‘has had its challenges’, says Kerry London boss
Fortis made its mark on the managing general agency landscape this week, with the announcement of a five-year deal to be the sole capacity provider for a new MGA run by broker Kerry London.
The deal, which has a no-capacity limit, will see Kerry London underwrite business for hospitality, health and fitness, and golf clubs.
Meanwhile, two separate divisions of MGA Primary Group, both underwritten by Fortis, merged on Monday. PBS Holdings joined Longhawk, formerly UK Underwriting (UKU). A spokesman said the merger would result in savings through “economies of scale” and refused to rule out job losses.
Fortis Insurance managing director Mark Cliff said the Kerry London deal was another demonstration of the company’s commitment to widening its distribution reach and product width in commercial lines.
It comes as the UK’s biggest insurers, Aviva and AXA, turn their back on MGA arrangements, arguing that they do not represent value in the current soft market. But Cliff, who headed up AXA’s relationship with Primary Group before joining Fortis, insisted that the smaller insurer would be able to make money from the business model.
“We begin from a strong starting point in that we have one of the lowest cost business models in our market and, as always, we will draw from the wealth of our team’s experience on MGA arrangements,” he said.
“One of the most important elements is the technical control through the audit of those relationships, as well as applying a new financial model and building strong working partnerships.”
Kerry London Group chief executive Damian Kissane said the MGA was a positive move by both parties in a year when the insurance industry “has had its challenges”.
He said the development of a sport and leisure division underpinned its strategy to develop its niche areas that included Professional Indemnity, Construction and Surety.
At Primary Group, the new company will be rebranded and will have a GWP of more than £220m. It will be chaired by Harold Posner, currently at Longhawk, with Tim Rolfe, chief executive of Primary, taking the reins as chief executive and Michael Warren of Longhawk as finance director.
In a statement, Posner said: “This is a very positive move for our business, our teams and our customers, expanding both our product range and distribution reach.”
PBS and UKU recently renegotiated their underwriting arrangements, with Fortis replacing AXA as prime carrier for UKU in February. Fortis is also providing capacity to PBS following AXA’s withdrawal.
PBS Holdings includes Primary General Insurance, Rural General Insurance, and Primary Claims.
New partners for Oval?
Brit and Allianz are believed to be the next insurers set to join the panel of Oval’s new series of managing general agents (MGAs), writes Danny Walkinshaw.
The consolidator is set to launch a number of MGAs through its “Unique” brand, targeting specific areas of business.
It is understood that Oval is planning to partner with five insurers to launch five separate underwriting vehicles. It has already agreed a deal with Zurich on professional indemnity which will launch this month.
Allianz refused to say whether it was entering into an MGA partnership with Oval, but Allianz’s director of commercial broker markets, Simon McGinn, said: “Allianz Commercial has an excellent relationship with Oval and will continue to support them in a variety of areas within the Unique business arrangement.”
In a statement Brit said: “We can confirm that we enjoy a strong trading relationship with Oval but we are not able to comment on specific initiatives.”
Oval group managing director Jeff Herdman refused to confirm MGA arrangements with Brit and Allianz. “We continue working with the insurance market as actively as ever, but nothing has been confirmed yet,” he said.