Aquiline-owned residential property specialist MGA Wellington Insurance Group is working with boutique investment bank Evercore on a process that could lead to a sale, The Insurer can reveal.

Paul Poston – Wellington and Aquiline

The private equity firm has held a majority interest in Fort Worth, Texas-based Wellington for almost five years, after buying into the MGA in January 2016.

Wellington’s main operating subsidiaries include its core MGA platform Wellington Risk Insurance Agency, Wellington Claim Service and Wellington Premium Finance.

The company is led by Paul Poston (pictured) as president and CEO, positions the former EW Blanch and Aon Benfield executive has held since launching Wellington in 2006.

Wellington writes a series of programs through its MGA on behalf of a number of insurers, including fronting carriers that are supported by panels of reinsurers.

Its offerings include stated value, value, standard, select and select plus Texas homeowners insurance programs, with a range of coverage levels and perils depending on the option selected.

Wellington also offers a quake program for properties in Texas with up to $15mn in insured value, and a coastal insurance program covering windstorm, hurricane and hail.

Details of the MGA’s financials are not known but sources said it is likely to write somewhere between $200mn-$250mn of gross premiums.

It underwrites on the A- rated paper of several hybrid program fronting carriers, including Incline Casualty Company, State National, Transverse and Trisura Specialty, as well as quake specialist Palomar Specialty.

The MGA also writes program business on behalf of Agricultural Workers Mutual Auto Insurance Company and Aventus Insurance Company, which is also owned by Aquiline.

Potential suitors

Sources have suggested that potential suitors for Wellington could include expansive coastal MGA platforms such as Orchid, or other private equity firms.

At the time of its investment in the MGA, Aquiline said that Wellington had demonstrated its ability to scale its platform with the right distribution and carrier relationships “and is well-positioned to grow through geographic expansion”.

Wellington has been looking to expand its operations beyond Texas into other coastal states and last year held discussions with Centauri Specialty Managers (CSM) and its parent Centauri Specialty Insurance Holdings (CSIH) about a tie-up.

The arrangement would have allowed Wellington to expand its business out of Texas and into other states Centauri writes in. Although it is Florida-focused, Centauri has expanded its footprint to write business in nine states: Alabama, Florida, Hawaii, Louisiana, Mississippi, Oklahoma, Massachusetts, South Carolina and Texas.

The discussions came to light in a poaching lawsuit filed by CSIH and its MGA CSM against Wellington and a group of CSM employees who left to join the rival firm just weeks after a deal was agreed for CSM to be acquired by Applied Underwriters.

The lawsuit alleged Wellington had breached non-solicitation provisions in a confidentiality agreement between the parties signed when they were discussing the potential tie-up.

CSIH agreed to an injunction order with the former employees and Wellington in June that ended the dispute and put a number of restrictions on the defendants, including solicitation of employees.

Wellington’s owner Aquiline was not a party to the suit.

Aquiline has been a serial investor in the insurance sector with past investments including Validus, TigerRisk, The Wright Insurance Group, Ark, Beach and Conning.

Aquiline current and former insurance investments

As well as Wellington, current investments include StarStone US, Armour, ERS and Relation.

The Jeff Greenberg-led firm earlier this year closed its Financial Services Fund IV with more than $2bn in total commitments to continue its strategy of investing in key industries of the global financial services sector, including insurance.

Aquiline, Wellington and Evercore declined to comment on this article.