R&Q’s program management and fronting specialist Accredited now has $1bn of contracted gross written premium (GWP) across its US and European platforms and has plans to further extend its footprint by geography and the paper it can offer MGA and reinsurer partners.

Colin Johnson and Todd Campbell – Accredited

Speaking to The Insurer, Colin Johnson, CEO of European Program Management at Accredited Insurance (Europe) Limited said that the platform he manages now has around 28 binders on its books through 20 MGAs and is contracted to around £400mn ($493mn) of GWP on an annualized basis.

The expansive European platform has been adding around 8-10 deals a year.

In the US, the Accredited Surety and Casualty Company platform run by president and CEO Todd Campbell has also been rapidly adding programs over the last couple of years and now has contracted GWP of just over $500mn, taking the total across the group to $1bn.

And as the only operator in the program fronting space with meaningful platforms in the US and Europe, the executives believe Accredited is in a unique position to capitalize on growth opportunities as well as a demand from the global brokers for Transatlantic solutions.

“It’s really powerful to be able to say that in a single phone call you can get access to highly rated paper with the broadest licensure across Europe and America in one go. There’s not another company that can do that,” Campbell told this publication.

The Accredited playbook

He added that the group aligns its program fronting operations on both sides of the Atlantic around processes and a common view on how it takes in and reviews business.

The company has also built out its ranks adding talent across its US and UK operations in a move it says brings depth to its business.

As reported earlier this week, R&Q’s plans for Accredited include a target of $1.5bn to $2bn of GWP on the program platform by 2022-2023.

In its 2019 earnings the company said it is upbeat on growth prospects in the hardening insurance market.

R&Q’s program division benefits on the margin from higher rates in a hard market because it earns a commission (typically around 5 percent) in exchange for lending its AM Best rated capacity, licences and infrastructure to MGAs and reinsurers, their ultimate risk capital partners.

But it also predicted that the forthcoming shake-up caused by the Covid-19 pandemic will lead to more MGAs looking for new program and reinsurance capital partners.

European opportunity

In Europe Accredited is targeting what it believes is a significant opportunity for further growth in an MGA market that is estimated to equate to as much as £100bn in GWP across all countries.

“We’ve got a very encouraging pipeline with people realising we are here for the long haul and keen to engage with us,” said Johnson.

Colin Johnson

The origins of the European platform came from its parent’s move in 2013 to set up R&Q Malta, initially with the aim of handling its growing European legacy portfolio.

In 2016, R&Q’s move into the live arena in the US coincided with a growing issue in Europe for MGAs and reinsurers with fronting capacity largely unrated and in many cases inadequately funded or administered. This led to a wave of carrier exits from the space in 2017/18 and provided a perfect scenario for Accredited to exploit, said Johnson.

“We entered the market at a time when MGAs and brokers were looking for stability, brokers welcomed us with open arms as a carrier with a strong balance sheet and an A rating that was going to be around for a long time. From day one brokers, MGAs and reinsurers came knocking at our door and it hasn’t stopped since,” Johnson said.


Its fronting platform allows reinsurers to access direct insurance business through MGAs.

Accredited is currently active in six countries – and is about to enter Poland as its seventh.

It has plans to round out its European footprint by having a presence in each of the ten countries that have a sizeable MGA presence, and will shortly open its Italian Branch to sit alongside its UK Branch which already provides a ready made Brexit solution for those who need it.

The focus of the European platform has been on compulsory lines of business such as motor and household.  However, it continues to diversify its portfolio into classes such as ATE, surety, EL/PL and PI and is able to write all non-life classes. Typically Accredited looks to work with MGAs that are not in direct competition with each other either by jurisdiction or line of business.

Broad US footprint

In the US, Accredited currently has 17 live programs as it has rapidly built up its book of business.

R&Q bought Accredited in late 2014 but the carrier platform has a much longer pedigree and has maintained a high level rating with AM Best for decades. 

After building it out from a monoline family owned admitted carrier to a national footprint of licenses with an increased level of surplus the platform has seen significant momentum since 2018.

Todd Campbell

“We were able to be more attractive to the national brokers and MGAs who wanted higher category financial strength [of AM Best rating]. Then in 2018 we started securing some very significant accounts,” Campbell explained.

In the US the focus tends to be on programs for general liability, private passenger and commercial transportation, and workers’ compensation, with the “sweet spot” for deal size in the $10mn to $50mn premium range.

“We like the SME and middle market space, because we think there are a lot of excellent MGAs there and a lot of interest. We see good production out there,” the executive continued.

Gross written andearned premium ($mn)

Despite being licensed in all states on an admitted basis, Accredited is currently not able to offer non-admitted paper.

But the carrier is in the process of evaluating opportunities to add an E&S capability to its platform.

“When we developed the initial strategy plan in 2017 we always knew that to be a full solutions platform we wanted to be on both sides of the house. Finally we’re at the stage where we’re at the right capital position and the right infrastructure position to move to that next phase,” said Campbell.

Deal criteria

In its expansion on both sides of the Atlantic Accredited estimates that it has turned away up to $4bn in GWP from potential programs in addition to those added to its portfolio.

The group expects to see its pipeline continue to grow with potential opportunities arising in the Covid-19 fallout as some insurers retrench from the program space.

However, it will continue to be highly selective in the programs it agrees to front for and manage, according to the executives.

Campbell said Accredited looks to do business with MGAs that have the best technology, underwriting discipline, market expertise and reputation.

Annual recurring commissionsbased on earned andwritten premiums ($mn)

“That’s our starting point. When we turn things away most often it’s because we’re not attracted to the line of business,” he explained.

Johnson added that the robust nature of Accredited’s due diligence and oversight process is a feature of the partnership approach it adopts with reinsurers and ensures that all MGAs are well managed from the outset.  He acknowledges that this hands-on style may not suit all MGAs.

He said that the carrier values its healthy balance sheet and monitors its capital requirements very closely as it continues to grow assessing the capital costs of every risk it writes.

Campbell said that the health of the deal pipeline and depth of the due diligence process meant that the carrier is typically running a significant number of parallel processes.

Pure fronting model

Unlike a number of the recent entrants to the program fronting arena in the US, Accredited until now has broadly operated as a pure front, and sought no retention.

The group recognizes that there has been a shift, with movement from reinsurers looking for fronting carriers to align with them through some level of risk sharing, and a number of start-ups billing themselves as retention model insurers to meet that demand.

“We are open to it but it’s not about whether it’s a good or bad performing line of business. It simply has to make a business case for our group,” said Campbell.

“There’s a misguided perception in the US where if you’re taking a bet it means you care more about the line and if you don’t take a retention you’re walking away and not paying attention. That simply isn’t true for our business. We treat every account as though it’s ours from the moment we do due diligence on it. Our processes are deep, robust and extensive,” he added.

The executive said where some reinsurers had questioned the pure fronting model favoured by Accredited, the carrier had invited them in to due diligence processes.

“They’ve said yes and they’re delighted with it. We welcome that every time because it only makes us a better company,” he explained.

Johnson reiterated the role of thorough due diligence of MGAs in the process of evaluating potential deals.

“We do far more than simply put our paper up front and sit back and enjoy the ride. The reality is that we view everything as if it’s being retained by ourselves, our partnership approach with our reinsurers means they can share in our due diligence, share in our oversight, they can attend audits with us, whatever gets them comfortable,” he commented.

“But as we sit today the group has sold its fronting credentials to analysts and shareholders on the basis that we’re minimum risk retainers and that’s where we’re at,” the executive concluded.