Dual has reached $3.1bn of GWP in the 2022 fiscal year driven by organic growth of 31 percent as well as its Align Financial acquisition, and is now positioned as a global underwriting platform that can attract capacity to help close the coverage gap for insureds, according to David Howden and Kieran Sweeney.

Kieran Sweeney David Howden

The Howden Group founding CEO and Dual Group executive chairman spoke to our sister publication Program Manager in a joint interview at Target Markets last month a year on from the transformational deal closing.

The acquisition combined with organic growth of 31 percent drove GWP at Dual from $1.7bn in 2021 to $3.1bn in 2022, based on a constant rate of exchange, with the firm’s accounting year-end set at 30 September.

And Howden said that the $800mn acquisition of Align Financial and subsequent deal to buy TigerRisk and create specialist MGA practice SabRE demonstrate a strong commitment to the space by the firm.


Source: Dual

Note: Fiscal year to 30 September; $ at a constant rate of exchange

“The reality is that MGAs have come of age and by combining we created something really unique: a global MGA operating in 19 countries with 11,000 insurance broker partners and 90 insurance carrier partners.

“Then as a group we were thinking about where underwriting capital is going to come from, and long before Hurricane Ian there was a strain in the market. So we started thinking about how to get smart around underwriting capital and getting it to market. That was behind Howden SabRE,” he explained.

As previously reported, SabRE was formed to bring together MGA-focused capabilities from across Howden Tiger and the rest of the group around the former GC Access executives led by Michael Jameson and Matt Beard that were brought on board earlier this year.

Howden said that harnessing these capabilities will allow the group to bring its expertise not just in underwriting, but understanding of the reinsurance market, capital markets capabilities and the London market through its Bowood arm.

“It’s about bringing the whole skill set to try and make the MGA space – that’s Dual and third-party MGAs – sustainable and long-lasting, and to help the insurance market as a whole solve some of the problems it’s got.

“It’s not about taking market share but being a solution to huge coverage gaps opening up where clients are finding they may not have coverage either because people are worried about aggregation, whether that’s cyber or cat, or pricing now means it’s unaffordable,” he added.

Capacity draw and cyber

Sweeney, the former Arrowhead CEO who grew the Align Financial platform including MGAs such as Catalytic before the deal with Dual, said the firm has a pipeline that is stronger than ever, validating the decision to combine the businesses.

“We’re one of a very few at scale and the only one with the geographic spread to build a global underwriting business using this model. I think we’ve got an unrivalled platform and now having added TigerRisk we’ve got a group with the capabilities that rivals anybody out there.

“That means we can make our case to capacity to support us to go and bring the solutions that are needed. We can be a one-stop shop with more capacity because of multiple balance sheets that we can access and bring more limit than individual carrier balance sheets in many products,” he said.

Kieran Sweeney PQ

The executive suggested “smart capital will go to smart delivery”, and Dual as part of the Howden Group can provide that delivery, as he highlighted the potential to bring new forms of capital including ILS to areas like cyber.

Sweeney said that cyber will follow cat as towers of capacity are needed to meet the demands of clients, and that the MGA model will be well suited as a vehicle to bring that capacity to buyers.

“We’ve got the ability to get in front of capacity with a balance of trade thanks to what David [Howden] has built in the rest of the group [including retail] to have the right conversations. And I think we will find increasing numbers of ways to bring solutions to the market where for capacity providers it will make more sense working with us than doing it themselves,” he added.

David Howden PQ

He indicated that Dual will invest in bringing talent to the platform, as it has in cyber, as Howden Group continues to build “world-class capabilities”.

“There aren’t many examples of products where what the client needs from us as brokers and advisors is almost exactly the same as what we need as underwriters to assess risks and underwrite.

“So when we bring together a giant underwriting platform and giant broking platform we can build something that’s leverageable in both directions, on behalf of carrier partners on the underwriting side, and on behalf of our clients on the broker side,” Sweeney explained.

Howden said that he believes the MGA and programs space has the potential to become a $150bn global market, with an opportunity to maintain a strong growth trajectory and be very attractive to both capital and talent.

“There’s all sorts of reasons why capital might find the MGA route attractive, as opposed to more traditional insurance. And if we do that – and that’s what the complete ecosystem we’ve created is looking at – I think that’s a big opportunity,” he concluded.


Deliver profits to remain relevant


David Howden separately addressed Target Markets delegates and said that the MGA sector has a responsibility to deliver a “proper” return to capital providers in order to remain relevant and position itself to address significant opportunities presented by the shifting risk landscape, including climate change.

He highlighted how macro and micro capital challenges facing the reinsurance sector – which have been compounded by Hurricane Ian – are impacting the availability of cat capacity.

And he also pointed to under-pressure underwriting results at Lloyd’s and specialty insurers that have been failing to earn their cost of capital.

“Would you as a new investor want to park your money into our business? It is the reality, partly, of why there’s a significant capacity shortage in our market, because the returns haven’t been good enough,” Howden commented.

“I think we need to be very aligned [with capacity providers] and recognise that we have to protect the capital and in fact not only protect the capital, we have to bring in more new capital … we need all sorts of capital to come in because without it, we aren’t going to grow our businesses and grow our market.”

Howden said it is critical for the prospects of the wider insurance industry for it to refocus its efforts on serving the needs of clients by partnering with entrepreneurs to help them build their businesses and take risks off their balance sheets.

“I want to close the relevance gap, and I believe that GAs, MGAs and program administrators are really capable of doing that,” he said.