Online Agency Insureon Secures $3B in Capacity from Lloyd’s to Launch MGA for Small Business

By | July 25, 2016

Insureon, an online agency for small business insurance, has formed a new managing general agency (MGA), Insureon Underwriting Managers, which will operate as a division of Insurance Noodle, the company’s wholesale brokerage subsidiary.

The new MGA will target hard-to-place coverage for home-based businesses and coastal homes at first, with plans to add other niche products in its first year.

Insureon Underwriting Managers is being supported by more than $3 billion of capacity from various Lloyd’s of London syndicates, according to Ted Devine, CEO of Insureon Holdings.

The formation of Insureon Underwriting Managers follows the company’s tribunalization with Lloyd’s of London earlier this year. This authorized Insureon as a coverholder, giving it direct access to the Lloyd’s market.

“Insureon Underwriting Managers represents the logical next step in our strategy,” Devine said.

The new MGA will start out offering niche coverage for coastal homeowners, including named-storm coverage, and for home-based business risks.

But additional products are in the works.

Devine says that of the 1,400 industry verticals/segments that make up the small commercial segment, Insureon has been able to compete on about 75 percent of the market with its carriers. “That means there’s about 25 percent of those industry verticals that our primary carriers don’t want. If we are going to satisfy those other 300 verticals, we had to create our own MGA-driven products,” Devine added.

Insureon Underwriting Managers will selectively target verticals where Insureon’s primary carriers will not write, Devine said. “An example, is mental health therapists,” he said. “We do not have a primary market that wants that risk classification for liability.

Devine said the firm’s goal is to add 20 MGA-driven niche verticals in the first year utilizing different carriers for different verticals.

“Our end objective is to be the leading player for small businesses with under 25 employees who want to go online and purchase insurance,” he said.

The products offered by Insureon Underwriting Managers are available only to Insureon’s clients, to select agents via Insurance Noodle membership, and through Insureon’s exclusive retail channels.

Devine said that relationships with its primary carriers will not change. “We are not trying to attack the industry, or be a disrupter,” he said. “We greatly appreciate and understand the power of our primary carrier relationships and their ability to support clients,” he said. “These relationships will not change and will only continue to grow. At the same time, we saw a big appetite in the market for hard-to-place and unique risks that primary carriers don’t want. Insureon Underwriting Managers allows us to build capacity to meet those customers’ needs.”

Chicago-based Insureon Holdings is an instech company composed of Insureon, a retail small-business insurance agency; Insurance Noodle, a wholesale brokerage; and Insureon Underwriting Managers, an MGA. The firm said it has grown 30 percent in 2016, writing some $240 million in premium.

Devine is former president of Aon Risk Services and previously was CEO of Aon Re and a senior partner and director of McKinsey & Co.

Last October, venture capital firm Oak HC/FT gave Insureon $31 million in new funding. Patricia Kemp, general partner at Oak HC/FT, joined the Insureon board of directors at that time.

In January, Insureon added two key executives from The Hartford and PwC. Brandon Hickey, formerly with The Hartford, became president of Insureon Brokerage, while Mark Thompson, a PwC analyst, was named senior vice president, Product Excellence.

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