Applied Underwriters launches E&S casualty MGA led by Day

Applied Underwriters has established a new E&S casualty MGA led by former Tokio Marine HCC executive Chris Day, with initial offerings targeting the New York construction market, The Insurer can reveal.

Day, who will be president of Applied Specialty Underwriters, will be joined by 11 veteran underwriters.

Offerings in the New York construction segment will include general liability, excess liability and workers’ compensation.

Products being launched on the platform include an innovative two-line wrap-up solution for projects in New York with construction cost between $50mn and $250mn.

The solution provides general liability limits of up to $3mn per occurrence and $6mn in the aggregate, as well as workers’ compensation coverage.

The MGA is also offering renewable New York general contractor policies that include general liability limits of $2mn per occurrence and $4mn in the aggregate to insureds with construction costs greater than $20mn.

Its New York excess product provides capacity of up to $3mn to be used over project-specific and annual general contractor policies.

Applied Specialty will underwrite on the AM Best A rated paper of Texas Insurance Co, a subsidiary of Allied Underwriters-owned North American Casualty Company that has E&S licences.

It will also look to write on behalf of other carriers as it rolls out its suite of products across the specialty casualty segment.

The new MGA is currently in the process of appointing wholesalers to work with independent agents and retail brokers to distribute its customised products and services to businesses.

Day told this publication that the timing of the move to launch Applied Specialty coincided with the dual challenges for the construction industry of Covid-19 and a hard insurance market.

“We had the opportunity with Applied to sit down and come up with some really creative solutions to some of the challenges, particularly in the New York construction market,” he said.

The MGA has started to accept submissions for its New York multi-line construction wrap-ups, renewable general contractor policies and construction excess liability placements and is expected to begin underwriting in the coming weeks.

“Applied Specialty is on its way to a major position in our segments of the insurance market,” Day added.

New York construction is seen as one of the world’s most difficult exposures to insure, with limited options for contractors and agents and a small pool of carriers offering capacity.

Day was most recently president of the casualty group at Tokio Marine HCC. Before that he was president of primary casualty for Navigators Group and has also been national product director for Fireman’s Fund Insurance Company.

Steve Menzies, CEO the MGA’s parent Applied Underwriters, said: “Our year-long research, together with business and broker demand, have led us to create Applied Specialty and to offer the coverages, formats, and pricing they seek for several specialised lines.

“The naming of Christopher Day to head this effort signifies our commitment to our partners across the nation to provide the leadership and market expertise of an experienced, accomplished underwriting professional,” he continued.

Applied UW branches out

The launch of Applied Specialty is the latest expansion by Applied Underwriters following its buyout from Berkshire Hathaway by CEO Menzies in a transaction that closed last October.

The deal saw Menzies team up with the Quasha Group and Quadrant Management to buy out the workers’ compensation specialist’s core insurance subsidiaries from the Warren Buffett-led investment giant, in a move first revealed by this publication.

Quadrant Management, the investment firm that bought into Jamie Sahara’s Rivington Partners MGA, acquired the non-insurance service companies of Applied Underwriters.

The transaction triggered significant expansion plans for Applied Underwriters into other areas of the US P&C sector.

In June this year the group bought South Carolina-based trucking MGU Blue Ridge Specialty with ambitions to build out the platform nationally.

And back in April Applied Underwriters bought the MGA of Florida homeowners specialist Centauri Insurance along with an option to acquire its two carrier subsidiaries.

In a statement to The Insurer at the time, the company said that given its nationwide carrier platform and “financially over-capitalised and liquid position”, Applied Underwriters expected this to be the first of “many transactions” as the impact of the Covid-19 shutdown unfolds on a hardening P&C market.