Big changes are ahead at The Schinnerer Group, a managing general underwriter (MGU), which is getting a new name – Victor – and has some major expansion plans.
From its current premium base of $1.2 billion, Victor has plans to double its size over the next few years through a combination of organic growth and acquisitions, said Christopher Schaper, CEO of Chevy Chase, Md.-based Victor. Schaper is located in the company’s Bermuda office.
The Schinnerer Group’s businesses will start using the Victor brand over the next year, and combine to operate as a global entity. The companies include Victor O. Schinnerer & Co. in the U.S., ENCON in Canada, Bluefin Underwriting in the UK, Mees & Zoonen in Italy and the Netherlands and Schinnerer’s operation in Bermuda. Recent Schinnerer Group acquisitions, ICAT and Dovetail Insurance, will also be part of the Victor global business but will retain their current names.
Why was a rebranding necessary when the businesses are successful? Schaper pointed to a changing industry in a globalized world. As the company grows, the brand needs to resonate internationally – and digitally, he said.
“By unifying our companies under a global brand and combining capabilities in analytics, underwriting and technology, we will be able to more quickly offer innovative insurance products and services to our clients around the world,” said Schaper in a statement when the rebranding was announced.
“We felt that Victor was a simpler name – frankly, more straightforward. It certainly works well internationally,” he said, admitting that “Schinnerer” doesn’t necessarily work well more broadly as a global brand.
Schaper described the rebranding exercise and the company’s growth plans in an interview with Insurance Journal.
After considering nearly 600 different names for its rebranding – many of which had already been taken – the company came almost full circle when it decided on “Victor.” It not only resonated with the company’s roots as Victor O. Schinnerer, which began operating in the 1930s, it also strongly resonated “with what we’re trying to accomplish – creating a win-win environment for all parties that come to the table,” Schaper explained. “We’re all victors when we work together as a group.”
It goes well beyond the name of a person, he emphasized. “As an MGU we’re servicing insureds as well as agents and brokers, carriers and other capital providers. And we’re trying to do that in a very strong fashion and create value for everyone across the board.”
Moving from his discussion of the company’s new name to its growth plans, Schaper said Victor is planning to double its size – very carefully – over the next few years with organic growth and acquisitions, which will complement its business with products or geographical locations.
“Obviously, Victor will move very safely and very carefully [when considering acquisitions] because we’re in a market” that is highly competitive across all products, he added.
Initially, Victor will be looking at growth in the U.S., the UK and Europe, while eventually considering opportunities in the Australasian market, Schaper said.
As an example of a strategic acquisition, Schaper cited the example of the company’s purchase in August 2017 of International Catastrophe Insurance Managers. ICAT is a U.S.-based managing general agent that focuses on property risks for small-and-medium-sized enterprises (SMEs).
The Schinnerer Group had long been focused on casualty and specialty lines of business and did not have much of a property book, he explained. “As we were thinking about growth opportunities, when the ICAT opportunity presented itself, we thought it was a very good complement to our overall book.”
Further, he added, ICAT specializes on a line of business that has the ability to scale, not just in the United States but also globally, as the need for property cat capacity continues to grow. “ICAT was an organization that had strong reputation; they’ve been around for 20 years and they were a technology-based MGA as well.”
Speaking of technology, Schaper said that also has been, and will continue to be, a focus for Victor, so it will look at acquisitions and technology that can help the company improve its efficiencies. “We’ve got over 25,000 active insurance agents that we engage with. How do we do that better? How do we create better efficiency for them?”
He predicted that number of agents will rise as Victor continues to expand, so it matters how Victor brings efficiency to the table and creates value in the market.
He pointed to the example of one of the company’s lines it has been underwriting for decades for a U.S. insurer with small, medium, and large sized accounts in its overall portfolio. “We’ve instituted a new technology that has shortened the amount of time for the accounts to be underwritten from two to three days to just a few minutes.”
Schaper thinks the MGU/MGA business model is a great model to create change. “We can do a lot without all the head count, all the bricks and mortar. We can actually create value by either partnering with other enterprises or just being able to institute these tools into a line of business, verify that it works, and then expand it into multiple lines of business.” (The company’s global businesses currently employ 700 people, mostly in North America.)
In a separate example of innovation, Schaper pointed to last year’s launch of a product called Alternus. “What Alternus is seeking to do was actually to bring alternative capital into the insurance arena and directly provide the benefits of alternative capital to insureds – the companies that actually support the entire industry.”
Alternus was the first dedicated commercial insurance solution for retail clients backed by alternative capital, he said, explaining that, in the past, alternative capital primarily benefited the industry’s insurance, reinsurance and retrocessional areas, but not insureds.
Alternus is exclusively offered through Marsh and covers up to 10 percent of an insured’s entire property insurance program with up to $200 million in limits per program, according to the April 2017 announcement. The solution is underwritten and managed by Schinnerer and backed by a combination of Allianz Global Corporate & Specialty (AGCS) and alternative capital through asset manager Nephila Capital Ltd. (Victor Insurance is a subsidiary of broker Marsh & McLennan).
“We think we bring the value proposition of alternative capital which includes stability in terms of security. Alternus provides better and more enhanced security to the insureds as well as at better prices and terms and conditions, Schaper said in the interview. He noted that Alternus generated millions of dollars in premium in the first year and represented trillions of dollars in total insurable value (TIV).
Schaper said an MGU can provide a strong value proposition by “being able to access all the tools that exist and that are coming to bear in the industry and to do it nimbly. Then we need to be able to take those tools and apply them to actual lines of business or to the insureds’ needs.”
That’s what Victor is seeking to do with its new global brand, its growth plans and its aim to tap into the latest technological innovations. “Bringing us together collectively is a way for us to enhance our intellectual capital capabilities; we are bringing together the minds of the entire team, globally, to provide real changes for the industry.”
In its rebranding announcement, Victor laid out its strategy, which is founded on four key cornerstones:
- Combining extensive underwriting experience with modern data and analytics capabilities.
- Providing cloud-based solutions that enable agents and brokers to quote, bind and issue insurance policies in real time – all in one place.
- Enabling a global network of more than 25,000 active insurance agents and brokers.
- Collaborating with leading insurance carriers and alternative capital providers to offer organizations innovative coverage solutions.
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