Vantage confirms surplus lines acquisition with A- rating as “critical” step in US strategy

Vantage Group Holdings has confirmed it has bought a surplus lines insurer that has been given an A- rating by AM Best allowing it to write on its own non-admitted paper in the US in addition to an existing strategic carrier partnership understood to have been struck with State National earlier this year.

In an announcement this morning, the Bermudian Class of 2020 start-up said that the Illinois-domiciled domestic surplus lines insurance company it has acquired is licensed in 47 states.

As previously reported, AM Best has granted an A- rating to the carrier that is in line with its new parent. The shell company has been renamed Vantage Risk Specialty Insurance Company following the injection of around $85mn in new capital, bringing the total capitalization of the E&S carrier to $100mn.

Greg Hendrick-led Vantage also confirmed that it initially launched its US insurance business in May this year as it entered into a strategic partnership with a leading property and casualty insurance carrier operating across the US.

Sources said that the partnership was struck with Markel-owned fronting carrier State National, which holds an A rating from AM Best.

Although Vantage didn’t name the carrier, it said that the partnership had allowed experienced underwriting teams already added by the start-up to issue policies in selected lines of business with full access and authority to highly-rated paper in all 50 states.

The carrier is also understood to be in the process of seeking a shell acquisition to provide it with admitted insurance company capabilities.

The company has been making a series of senior underwriting hires, including in financial lines, healthcare, excess casualty and political risk and credit as it prepares to build its insurance portfolio of business after launching in reinsurance in time for the key 1 January renewal via its Class 4 Bermuda company Vantage Risk Ltd.

Growth trajectory

Vantage CEO Hendrick commented: “This acquisition is a critical step in developing our US business operations, enabling our teams to underwrite through our own subsidiary. We are very pleased to have our current A- (Excellent) AM Best rating extended to this new Vantage entity.”

He said that partnering with a “nationally recognized industry leader” earlier this year had allowed the start-up to immediately enter the US marketplace as it built its platform in the country.

“This acquisition, coupled with our strategic partner relationship, positions Vantage to provide US insurance protection where it is needed.

“These transactions continue our planned growth trajectory and reflect our commitment to underwriting business where existing capacity is shrinking, leveraging our opportunity in the Specialty Insurance marketplace,” the former Axa XL CEO added.

Vantage has already expanded writings from reinsurance in Bermuda to also include financial lines, healthcare and excess casualty.

It has also launched collateralized reinsurer AdVantage Retro I Ltd allowing investors to partner with Vantage Risk to access selected reinsurance risks, and sponsored its debut cat bond with Vista Re Ltd.

Vantage Group Holdings officially launched in December 2020, with Hendrick as CEO and former Arch CEO Dinos Iordanou as non-executive chairman. It was set up with $1bn of capital in an investment led by private equity firms The Carlyle Group and Hellman & Friedman.

The company has been actively hiring on both the insurance and reinsurance sides of the business.

However, as revealed by this publication earlier this month, global insurance CEO Jack Kuhn has left the start-up. Hendrick will serve as the interim head of insurance while continuing to lead the firm.

Kuhn said that after spending the past eight months helping to build Vantage’s insurance platform, he had made the “difficult decision” to step down and focus on other opportunities “both personally and professionally”.