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Once regulatory approval is granted in 1H 2023, the intermediary’s combined reinsurance arm Howden Tiger will cement its position as the fourth largest reinsurance broker with $350m+ in revenues.
The deal also brings together two high-profile industry entrepreneurs: Howden, who co-founded the Howden Group in 1994, initially as a D&O MGA/coverholder, and Rod Fox, who co-founded TigerRisk in 2008 and has overseen his firm’s march into US MGA /program market in recent years.
And last week saw the two companies unveil a new entity, SabRE, which will formally go live once the combination is complete. It was the first new strategic action announced by the firms since the deal was revealed, and also underlines the growing importance of reinsurance capital to the global MGA/program sector.
saber will combine specialist coverholder teams from Howden RE, TigerRisk and Howden’s delegated binding authority Bowood and says it will be the industry’s largest dedicated global MGA/program reinsurance intermediary, advising on the placement and structuring of £6bn. USD in gross premium (GWP).
Since last time Appointment in 2019, the global MGA/program market has seen a renaissance, with reinsurance capital and fronting structures supporting much of its growth, and with entrepreneurial guarantees switching providers to MGAs.
In fact, Conning recently estimated that the US MGA market alone had expanded to $70B+ in size based on 2021 data and predicted it will soon exceed $100B. The boom is supported by an explosion of interest in fronting carriers, which sit between MGAs and reinsurers and ILS funds. Transverse, which launched only three years ago, is being acquired by MS&AD for an initial $400 million. in a move that appears to have set a new marker on valuations in a fronting carrier segment where there are now more than 20 players operating. Market growth is seen in both affiliated and independent companies.
This alone guarantees that the MGA/hybrid equity model will be a hot topic over the next few days. But interest will be further boosted by Richard Brindle’s trailblazing move to split his London/Bermuda specialty (re)insurer Fidelis into separate underwriting and balance sheet components, a move he says recognizes the distinct valuation appeal of the two propositions.
Bowood chief executive Stephen Greener will chair a US-London leadership team that includes TigerRisk program manager Neill Cotton and Howden RE newcomers Michael Jameson and Matt Beard.
The latter duo recently led a 13-strong team that moved from Guy Carpenter’s dedicated MGA reinsurance unit GC Access to Howden RE earlier this year, sparking an as-yet-unsettled legal battle between the two firms.
The new unit will report to Howden RE chairman Elliot Richardson – who Guy Carpenter claims in his legal filings was the mastermind behind the bold move – with the director describing Saber as an “industry first”.
“SabRE will have a combined offering of unmatched depth, scale and expertise and be a core part of what we are building with TigerRisk – a leadership position in our chosen markets and a superior offering for the modern customer,” explained Richardson.
Bowood is a Lloyd’s broker bought by RK Harrison in 2008 which operates separately from Howden Group’s own MGA behemoth Dual and places ~1.5bn. USD GWP through a series of London-led programmes.
TigerRisk CEO Rob Bredahl added that saber will also benefit from the combined group’s capital advisory and banking resources, as well as other services, including data and technology.
“The customized capabilities of saber will produce the only ‘full stack’ reinsurance broker in the MGA and program market. saber will be the leading capacity finder, investment banker and strategic advisor for this fast-growing and important sector,” explained Bredahl.
Bredahl will become CEO of Howden Tiger when the two companies are formally combined after regulatory approval. Fox becomes chairman and Richardson vice-chairman. All three have previously worked together at the British reinsurance broker Benfield. President Tim Ronda, another Benfield alumnus who left Aon for TigerRisk last year, and managing director of international Bradley Maltese round out the senior leadership team.
See The insurance company’s TV Monte Carlo interview which will be broadcast on Tuesday 13 September and analyzed in our last MC Daily Edition on Wednesday 14 September
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