New owner APC Underwriting says Folgate will underwrite niche commercial and liability products

Brian Russell APC

Managing general agent APC Underwriting is gearing up to relaunch Folgate, the run-off insurer it bought from Towergate, as an in-house insurance company during the second quarter of 2014.

APC chief executive Brian Russell said he was working with regulators at the Financial Conduct Authority and Prudential Regulation Authority to secure approval for Folgate to start actively underwriting insurance for niche commercial property and liability products.

The plan is for Folgate to initially underwrite policies for APC before potentially widening out to provide capacity for brokers and other MGAs.

Russell said Folgate’s niche commercial business writing proposition would help firms who had to look for a new capacity provider each time an insurer lost appetite for the particular line of business that it will work in.

He explained that bespoke SME products were less likely to be affected by rate changes in the overall market.

Russell said: “An MGA is only as good as its capacity. What this does is it brings continuity and longevity for policy holders.

“The fact that we will be underwriting for our own insurance company means we don’t have to seek every year to go and renew the contracts [which] can be a fairly long process.

“Most MGAs have got good relationships with their capacity providers, but they can [decide to] pull out for whatever reason and not write that class anymore.

“If you look at the financial issues in 2008, 2009 and 2010, insurers were looking to cut back their MGA exposure.

“Sometimes that makes it difficult for MGAs to go into the next year with capacity to write the business they want to write, or if an insurer takes over another you have to start building new relationships again.”

Details around capital strengthening ahead of Solvency II and how the MGA will manage its panel of insurers are still being worked out with the regulators.

Folgate was established in 1877 and stopped writing business in 2002.  Since then Towergate has administered the run-off of the business, principally household, motor, commercial including employers’ liability and travel policies. The run-off is being administered by APC.

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