Once regulatory approval is granted in the first half of 2023, the joint reinsurance arm of broker Howden Tiger will cement its position as the fourth largest reinsurance broker with revenues of more than $350 million.
The deal also brings together two prominent industry leaders: Howden, who co-founded Howden Group in 1994 initially as a D&O MGA/Coverholder, and Rod Fox, who co-founded TigerRisk in 2008 and oversaw his company’s journey to the United States MGA/Program market in recent years.
Last week saw the two companies unveil a new unit, Seef, which will officially start operating once the group is complete. This was the first new strategic move announced by the companies since the deal was revealed and also underscores the growing importance of reinsurance capital for the global MGA/Program sector.
Saber will bring together the teams of specialist coverage holders of Howden RE, TigerRisk and Bowood, and say it will be the world’s largest dedicated reinsurance/MGA program broker, advising on setting up and structuring $6 billion in gross written premiums (GWP).
since the past Randy Foo In 2019, the global MGA/Program market enjoyed a renaissance with reinsurance capital and front-end structures supporting much of its growth and with insurers swapping entrepreneurs for MGAs.
In fact, Koning recently estimated that the MGA market in the United States alone has expanded to $70 billion in size based on 2021 data and predicted that it will soon surpass $100 billion. The boom was supported by increased interest in frontline carriers falling between the MGA, reinsurance companies and ILS funds. MS&AD has acquired Transverse, which launched just three years ago, for an initial $400 million in a move that appears to have put a new mark on valuations in the front-end carrier segment where there are now more than 20 players working. Market growth is observed in both affiliated and independent carriers.
This alone ensures that the MGA hybrid capital model will be a popular topic over the next few days. But interest will be heightened further by Richard Brindel’s tracing move to split his London/Bermuda specialist Fidelis (reinsurance) firm into separate underwriting and balance sheet components, a move he says recognizes the distinct valuation appeal of the two proposals.
Bowood Managing Director Stephen Greiner will become a patient chair with the US and London leadership team that includes TigerRisk program president Neill Cotton and Howden RE newcomers Michael Jameson and Matt Beard.
The latter duo recently led a team of 13 that moved from Jay Carpenter’s MGA reinsurance unit GC Access to Howden RE earlier this year, sparking an as-yet-unresolved legal battle between the two companies.
The new unit will report to Howden RE Chairman Elliot Richardson – who Jay Carpenter claims in his legal filings to have masterminded the audacious swoop – with the CEO calling the sword “industry first”.
“Syber will have a combined offering of unparalleled depth, scale and expertise and will be an essential part of what we are building with TigerRisk – a leading position in select markets and a premium offering for the modern customer,” explained Richardson.
Bowood is a Lloyd broker acquired by RK Harrison in 2008 that operates separately from Howden Group’s MGA Colossus Dual, putting in about $1.5 billion in GDP through a variety of London-led programs.
TigerRisk CEO Rob Breedal added that Saber will also benefit from capital advisory and banking resources for the combined group as well as other services, including data and technology.
“The Saber-aligned capabilities will produce the only ‘stacked’ reinsurance broker in the MGA and software market. Saber will be the leading provider of capabilities research and investment banking and a strategic advisor to this fast-growing and important sector,” Bridal explained.
Bredahl will become Howden Tiger’s CEO when the two companies are formally combined following regulatory approval. Fox will become Chairman and Vice President Richardson. The three previously worked together at UK reinsurance broker Benfield. Completing the senior leadership group is President Tim Ronda, another Benfield graduate who left Aon to work at TigerRisk last year, and CEO of Bradley Maltes International.
We see Believer TV Monte Carlo interview airing on Tuesday 13th September and analyzed in the latest edition of the MC Daily Edition on Wednesday 14th September