Sutton National to retain up to 20% on programs
Sutton National will seek to differentiate itself in the fronting space with its ability to take up to 20 percent of the risk on certain programs as the start-up addresses an attractive pipeline of deals after securing an A- rating from AM Best earlier today, The Insurer can reveal.
Sutton National, owned by Brickell Insurance Holdings with financial backing from 777 Partners, has now officially launched its platform with over $100m in combined surplus.
Sutton’s admitted platform is licensed in 17 states and its newly formed E&S platform, Sutton Specialty, is currently eligible in 14 states, enabling the operation to offer a wide range of options to MGAs and program administrators.
Sutton National is actively in the process of expanding its admitted licenses and E&S eligibility and expects both carriers to be close to a national footprint by mid-2021.
In an interview with this publication, Sutton National CEO Shane Haverstick said the start-up has an “extremely robust” pipeline of potential program opportunities. He said the carrier will look across all P&C personal and commercial lines and will have the capability of taking up to 20 percent on specific programs.
“We will retain up to a 20 percent risk position contingent on the needs and structure of each program in combination with our underwriting appetite,” said the former Third Point Re executive.
Haverstick, who joined Sutton National earlier this year in a move first revealed by The Insurer, said the make-up of the senior executive team is key to the carrier’s ability to retain significantly more underwriting risk than a pure fronting insurer would in the program sector.
“We’re focused on building a balanced portfolio comprising E&S and admitted programs in both personal and commercial lines across the P&C industry. Our plan is to maintain strict adherence to line and geography concentrations so we can be thoughtful partners to our reinsurance and MGA counterparties”
Sutton National CEO Shane Haverstick on the start-up’s strategy
“The top management of the company have all been underwriters or in risk management positions in prior roles at risk-taking companies. Our strategy at Sutton National is to leverage that experience to add meaningful value to our partners and build a portfolio with a primary focus on underwriting profitability and alignment of interests,” he commented.
As previously revealed by this publication, Sutton National has secured the services of Russell Renvyle as CUO, with the executive joining after his exit earlier this year from The Hanover, where he was regional president in the US carrier’s program division.
The management team also includes Haverstick’s former Transverse Insurance Group colleague Lloyd Yavener as president, and insurance industry veteran Bill Hitselberger as CFO.
Haverstick added that Sutton National’s focus will be on building a portfolio of retained risk on a working layer basis, rather than excess or cat risk, as the carrier will place excess of loss cat reinsurance on programs where needed.
“We’re focused on building a balanced portfolio comprising E&S and admitted programs in both personal and commercial lines across the P&C industry. Our plan is to maintain strict adherence to line and geography concentrations so we can be thoughtful partners to our reinsurance and MGA counterparties,” said the executive.
Potential program opportunities are being sourced through existing relationships with program administrators and reinsurance brokers.
Sutton National’s launch comes at a time of strong growth opportunities for program carriers resulting from the retrenchment of traditional insurers and continued risk appetite from the reinsurance community.
Sources have previously commented that an increasing number of reinsurers are seeking greater alignment of interest with risk sharing from their fronting partners and potentially their MGAs.
777 Partners expands insurance sector presence
Sutton National, owned by Brickell Insurance Holdings, receives financial backing from the Miami-based investment firm 777 Partners, which specializes in financial services and alternative assets.
Sutton National represents 777’s latest significant investment in the insurance space via its affiliate Brickell Insurance Holdings. 777 Partners’ insurance investment strategy is spearheaded by managing partners Steve Pasko and Josh Wander and principal Jorge Beruff.
As previously reported, Brickell increased its investment in Randall & Quilter earlier this year, giving it exposure to the legacy and program space with a London-based company that has an established presence in both.
Brickell also made a move into the life and annuity space in 2019 when it acquired Texas-domiciled Merit Life Insurance Co. Merit, which has an AM Best rating of A-, will deliver innovative products to the retirement sector, beginning with a newly designed Contingent Deferred Annuity that provides guaranteed lifetime income to individuals.
Last year Brickell also formed a Bermuda-based reinsurer, 777 Re, to reinsure active and run-off blocks of life insurance and annuity business. 777 Re debuted with a $307mn annuity block reinsurance deal in August 2019.