Dallas-based insurance exchange MarketScout, which provides agents with access to specialty markets, has sold its workers’ compensation managing general agency business to Specialty Program Group.
MarketScout said it sold the specialty unit, which it said handles $100 million in business, in order to fund a planned expansion into insurance technology and other MGA ventures. The national unit specializes in underwriting for hard-to-place, high-hazard risks in various industries including transportation, construction, healthcare, retail and manufacturing.
Specialty Program Group (SPG) said it will re-brand the business as Specialty Comp Insurance Solutions.
The purchase price and terms were not disclosed.
“Joining the SPG team will allow us to partner with like-minded program operators and will add new breadth to our offerings and appeal in the rapidly growing program space. SPG will be a great catalyst for our program, people and continued success,” said Jay Chase, who will join SPG from MarketScout as part of the acquisition and serve as president of Specialty Comp Insurance Solutions.
SPG is a wholly-owned subsidiary of global insurance broker Hub International founded in 2015 to expand Hub’s reach into program and specialty business. The group, based in Summit, New Jersey, is headed by Chris Treanor, a former Marsh executive who co-founded Mercator Risk Services and most recently served as president of Preferred Concepts, an MGA.
This is the third acquisition for SPG. Last December, it acquired Michigan-based Global Marine, a brokerage specializing in boats, yachts, mega yachts, personal watercrafts, marinas, boat dealers and commercial marine vessels. On June 2 of this year, it announced it had acquired Paul Hanson Partners (PHP) and its affiliate, PHP International. Based in Napa, California, PHP is a national program administrator specializing in the moving and storage and last mile delivery segments of the transportation industry.
According to Treanor, SPG values quality underwriting and was impressed with “best in class” performance of MarketScout’s high-hazard workers’ compensation underwriting team. Chase works with a team of 13 expert underwriters who will be joining him at SPG.
He said SPG will continue its relationships with MarketScout agents using the program and while distribution is limited, SPG will likely expand it a bit to additional retail and wholesale brokers. “We want experts on workers’ comp,” he said.
Treanor added that SPG is on the lookout for additional acquisitions and currently has several in the pipeline.
Richard Kerr, founder and CEO of MarketScout, explained the rationale behind his firm’s strategy. “The MarketScout Exchange creates an incredible advantage for us because we can rapidly accelerate distribution for most any specialty program,” he said. “Quite literally, our underwriters see dozens of submissions each day from all across the U.S. without leaving their office. We want to utilize this advantage by launching new MGAs and implementing InsureTech concepts that will work well with our current platform.”
Kerr said MarketScout’s workers’ compensation MGA “reached full potential within our structure” and selling it in this market “provided exceptional returns and gives us the dry powder to do new deals.”
Kerr told Insurance Journal that MarketScout will continue to provide its agents with access to workers’ compensation through its other markets and it will in fact remain the largest client of the MGA being sold to SPG.
MarketScout currently operates seven MGAs and provides specialty brokerage for energy, professional and high net worth personal lines. The firm is a Lloyd’s coverholder and MGA for U.S. insurers. MarketScout owns and operates the MarketScout Exchange as well as other online and traditional underwriting and distribution venues.
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