Ambac has confirmed the launch of its Wyatt Blackburn-led specialty, participatory fronting program insurance business Everspan Group after securing A- AM Best ratings for its E&S and admitted carrier subsidiaries, in a move first revealed by The Insurer last July.
- New platform may retain up to 30% of underwriting risk per program
- Includes E&S and admitted carriers with $100mn+ of capital
- Ex-State National exec Wyatt Blackburn confirmed as president
- Former Crum & Forster and Endurance exec Steve Dresner is CUO and chief reinsurance officer
- Everspan will work with MGAs, PAs, brokers, regional insurers, reinsurers and the ILS market\
The platform includes E&S insurer Everspan Indemnity Insurance Company and admitted carrier Everspan Insurance Company.
With capital in excess of $100mn, Everspan Group has an AM Best financial size category of Class VIII and is expected to begin writing new specialty programs in the first half of this year.
In a statement, Ambac said the new platform may retain up to 30 percent of underwriting risk per program, and will source its business through MGAs, program administrators, brokers, regional insurers, reinsurers and the ILS market.
The start-up is the latest participatory – or hybrid – program fronting carrier to launch in a sector that has seen strong demand from reinsurers to work with the vehicles to access program insurance business.
As previously reported, Everspan’s management team includes former State National executive Blackburn as president and former Crum & Forster, Endurance Specialty and Gen Re executive Steve Dresner as chief underwriting and reinsurance officer.
Three pillar strategy
The Everspan launch is part of a three-pillar diversification strategy by publicly traded New York City-based financial services holding company Ambac.
The strategy includes a specialty program insurance business, the build-out of an MGA/MGU platform and other insurance and insurance-related businesses aimed at generating long-term shareholder value with attractive risk-adjusted returns, said Ambac in a statement.
Commenting on the launch, Ambac’s president and CEO Claude LeBlanc said it represented a “milestone event” and the core foundation of its specialty program insurance strategy.
“Everspan Group’s advanced participatory fronting model positions us to be a leading market for insurance distributors,” said the executive.
LeBlanc added: “Our broader specialty insurance strategy is focused on establishing and acquiring targeted best in class businesses with quality growth-oriented business models and proven management teams.”
Blackburn said the start-up’s strong capital position and focus on underwriting results, measured risk retention, long-term relationships and avoidance of channel conflicts will differentiate it in the specialty program market.
“Everspan Group’s experienced executive team, with an established track record in the specialty program industry, combined with public company support, including deep operational and credit expertise, will allow Everspan Group to provide financial strength, stability, commitment, and continuity to our business partners,” he continued.
As previously reported, Ambac has begun to make progress on the second pillar of its strategy with a deal to buy accident and health-focused MGU Xchange late last year, in its first fee-business acquisition.
At the time LeBlanc said Ambac had been “actively pursuing acquisitions in the MGU and MGA space”, adding that the acquisition would generate recurring fee-based income with attractive risk-adjusted returns.
The Ambac turnaround
Ambac’s previous focus was as a monoline financial guaranty insurer but it has spent the years since the subprime mortgage financial crisis that began in 2007 running off its book and seeking to optimise assets and reduce liabilities including through a raft of long-running legal actions.
It went into Chapter 11 bankruptcy back in 2010 as its bond insurance unit was no longer able to pay dividends to the holding company, exiting Chapter 11 in 2013.
However, under LeBlanc’s leadership it was able to exit rehabilitation via a restructuring transaction and in recent investor presentations the company has spoken of its desire to deploy capital “in a tax efficient way to diversify its platform and enhance long-term shareholder value”.
That includes a new business focus in specialty P&C insurance and reinsurance, credit and asset origination businesses, asset management and fee-based businesses, as well as insurtech and fintech related businesses.