With the US Q3 reporting season now at an end, pricing conditions in the booming E&S market were a regular topic of discussion on earnings calls with management.

Program manager

The evidence suggests there is no let up in momentum and that hard market conditions are likely to be sustained through 2021 and potentially into 2022.

And news flow in the program sector in recent weeks has been dominated by moves from MGAs, brokers, traditional program insurers and the new wave of hybrid fronting carriers to broaden capabilities and to capitalize on a market where conditions are the best seen since the early 2000s, in the E&S and broader marketplace.

In the November issue of Program Manager we report that Obsidian has secured an A- rating for its new E&S platform.

The hybrid fronting start-up, led by CEO Bill Jewett and CFO and COO Craig Rappaport, said the launch of OSIC had been driven by hardening rates in the E&S market and the increase in overall MGA activity in the sector.

Obsidian is just one of several of the new wave of program carriers to bring non-admitted paper in addition to admitted paper to the market.

As previously reported, R&Q’s program management platform has also formed a US E&S company, Accredited Specialty Insurance Company, which will enable it to expand its fronting/program services to the fast-growing $55bn market. The group recently announced the hiring of Aon veteran Pat Rastiello to lead the initiative.

Meanwhile, Trisura Specialty has demonstrated the benefits of an E&S platform as it reported surging top line growth in Q3, largely on its non-admitted platform.

And Sutton National has now launched with admitted and non-admitted platforms after securing its AM Best A- rating late last month.

The carrier is looking to take up to 20 percent of the risk on certain programs as it joins the ranks of hybrid fronting carriers looking to align interests with reinsurers.

Heightened MGA activity

There is plenty of evidence of heightened MGA activity in this issue too.

We report on new programs including the launch of cyber specialist Reliance Insurance with capacity from Canadian carrier Intact; a new E&S casualty MGA from Applied Underwriters led by Chris Day; and innovative insurtech moves involving Cover Genius and Pie.

Meanwhile, Paragon is looking to enter the contingency space as it builds a team around former Beazley executive Christian Phillips.

There is also a surge of M&A activity, as we exclusively revealed that Atlas General and Wellington are up for sale, while Constellation and Northeast Coverages have both made acquisitions.

Meanwhile reinsurance brokers are also refocusing their attention on the MGA and program sector, in part driven by growth opportunities in the buoyant E&S market.

In our exclusive Program Manager interview this month, Michael Jameson explains the rationale behind the launch of Guy Carpenter’s new GC Access unit and the enduring appeal of MGAs and the wider program market.

And in the program market there is also further evidence of the closer relationships between MGAs and carriers as they look to gain stable access to capacity.

MGA AM Re is in the process of raising funds to support a new E&S carrier, ReAlign has launched a surplus lines insurer, and Orchid’s reciprocal exchange joint venture with Homesite has secured an A- rating.

With wind in the sails of the E&S sector – and other segments of the US insurance market – opportunities continue to look highly attractive for program market participants.