Aurenity hits $100mn of in-force premium and eyes further portfolio diversification
Aurenity has surpassed $100mn of in-force premium across its four programs in the casualty space and is considering adding to its product suite in short-tail lines including property as well as targeted areas of professional liability, Program Manager can reveal.
The tech-enabled E&S MGA is also on course to deliver an operating profit in only its third year, after going into the black for the first time in Q2 2024.
And on its current trajectory the firm is on track to go past the $150mn premium mark in 2025 even without adding new products.
The business, led by former Brit executive Nick Davies, was launched with backing from Chicago-based investor Agman at the start of 2022 as an E&S MGA that it says blends expertise and innovation to offer a better view of risk.
Earlier this year it expanded its buffer excess casualty program with Everspan to a full $5mn lead excess offering after strengthening its reinsurance panel at its recent renewal.
That move means that Aurenity now offers $17mn of combined underwriting capacity across its primary, lead and excess casualty programs, with Palms Insurance and Fortegra its other insurance carriers on its casualty offerings.
The MGA also recently announced the launch of a new $5mn excess public entity offering with Vantage Risk. It is believed all Aurenity’s carriers take significant participation, with some retaining up to 100 percent of their programs
Conservative approach
Speaking to this publication, Davies highlighted Aurenity’s strategy has thus far yielded “very positive” results.
“Our approach is to harness technology to make our underwriter’s decision as well informed as possible. We are thoughtful about limit deployment, attachment and relativity across our programs and hyper focused on the accuracy of our technical pricing.
“We want to ensure we have optimal premium to line size balance whilst being mindful of venue concentration. Arguably MGAs should understand all this better than their carriers or reinsurers and we want to demonstrate we are excellent stewards of their capital,” he said.
The executive added: “We will generate an operational profit for the full financial year, without having raised any additional funds since our initial seed investment.”
Davies said that if Aurenity needs to fundraise to accelerate its plan it has plenty of options, but for now it will look to continue growing supported by its earnings with Agman fully behind it.
He attributed the progress so far to the MGA’s “agility” in using technology and outsourcing to ensure that it is only deploying investment funds into top tier talent and cutting-edge pricing, both of which are fundamental to its strategy.
“It’s enabled us to keep our expenses low, there are just 14 employees, and we don’t anticipate ever needing to grow headcount too much beyond that,” he said.
The executive continued that Aurenity is trialling Gen AI to speed up submission clearance and enhance the pre-underwriting process.
“Gen AI is going to make all this table stakes soon. We want our underwriters focused on risk selection and price adequacy. That’s where we spend our time and resource,” he continued
Commenting on potential products to add to Aurenity’s portfolio, Davies said: “We want to do a few things, and we want to do them at scale.
“Our focus has been on a measured growth while delivering profit for our shareholders and capacity partners. The next step is to add further diversity to our product set in the E&S space.”
Professional liability – including environmental and architects and engineers – as well as short-tail property business are areas that are likely to come under consideration, depending on the availability of top talent.
Davies said Aurenity is also investing in sophisticated analytics as the next phase of its technology roadmap. This would be especially beneficial in casualty, where many legacy businesses had evidently been mispricing risk for years before realizing the impact of social inflation.
“For us having the most contemporaneous view of frequency and severity is core to what we’re building, and we’ve solved some of that with high-resolution geographic loss data that we’re refreshing every quarter. We’re also capturing broader risk characteristics that are uncommon in the pricing process” he said.
Reinsurance support
Aurenity CUO Doug Trainor noted that the MGA has continued to strengthen its reinsurance panel, which is now made up of top A or A+ rated domestic and Lloyd’s reinsurers and doesn’t have any ILS or collateralized capacity supporting its programs.
“Year over year we continue to bring in new reinsurance partners that like our business and want to continue to grow with us and have shown that by expanding partnerships across the board,” he said.
The growing reinsurance support is evidence that Aurenity’s strategy of “blending expertise and innovation” is resonating with carrier and reinsurance partners, said Davies.
“We’re delivering what we said we would at launch, which is building a multi-line E&S MGA platform that attracts top tier talent and leverages cutting edge pricing technology.” he added.