The acquisition by AmWINS Group Inc. late last month of Networked Insurance Agents will achieve a number of objectives for both the Charlotte, N.C.-based distributor of specialty insurance products and the California-based aggregator.
Namely, the deal plays to each firm’s strengths without creating competition between the two, executives for both organizations told Insurance Journal.
In an unlikely admission, Scott Purviance, chief operating officer of AmWINS, acknowledged there are a few things the firm doesn’t do so well.
“One of the things we really didn’t offer, certainly not in any kind of meaningful way, is access to admitted products, clearly BOPs and comp,” Purviance said. “The platform that Networked has built out is tremendous in that space, and it will really allow us to offer a full suite of products for that retail agent.”
Wholesale specialty broker AmWINS operates through more than 100 offices globally and handles premium placements in excess of $13 billion dollars annually. According to Ben Sloop, president of AmWINS Access, a binding platform for small property/casualty business, AmWINS does business with more than 22,000 independent agents.
Networked Insurance Agents is an insurance aggregator specializing in the standard lines insurance segment. Retail agents served by Networked vary from small ($1 million to $5 million in total premium) to those reporting $15 million to $20 million in premium.
Larger agencies, those writing in excess of $20 million in premium, gravitate toward Networked’s Direct Access Insurance Service, a cluster model with about 30 firms and growing, according to George Biancardi, president and CEO of Networked.
Sloop, speaking for both firms, said that expansion doesn’t mean a movement away from their mainstay wholesale business.
“One thing I want to make sure we do get clear, because we’ve frankly have gotten a lot of questions about this over the last few days as the news of the acquisition has come out, is that we are very much committed to the wholesale model, and AmWINS’ model has always been wholesale,” Sloop said. “Networked … is a wholesale aggregator … and in both cases, our clients are retail agents, and both AmWINS and Networked are very much dedicated to that model of doing business.”
Standard Lines Access
“We routinely get requests to provide access on a range of standard market products, whether that be BOP, worker’s comp, or personal lines,” Sloop said. “The low-hanging fruit is simply connecting those folks with Networked, who’ve got those capabilities, and vice versa.”
Networked and DAIS are run as two separate businesses, and beside workers’ comp and BOP, a large portion of what agents on both sides write is personal and business auto, Biancardi said.
“In general, most of the admitted products that carriers sell, either commercial or personal lines, we have access to,” he said. “Now with AmWINS, we expect to have access to non-admitted as well.”
Biancardi’s expectation going forward is that agents now using DAIS will do business with AmWINS, which many Networked agents do already.
“As I see it in the future, they won’t compete. You either come to us or you go to AmWINS with the big accounts, big agents, non-standard,” Biancardi said. “I see it as very, very complementary.”
Sloop expanded on the importance of the E&S market to both firms and as part of their collective goals going forward.
“To George’s point, Networked has got almost 1,000 agencies in their footprint, and many of those agencies – all those agencies in fact – go into the excess and surplus lines marketplace today, and we’ve gotten multiple inquiries on both sides about how we can access products on either side,” Sloop said. “Long term, the vision is to build a more seamless and integrated value prop across the entire spectrum of standard lines of E&S.”
None of the three would discuss the terms of the deal, but all were happy to talk about possible expansion and new opportunities.
AmWINS has been particularly active lately. AmWINS Group Inc. and Partners Specialty Group LLC in April agreed to merge, with Partners becoming part of the AmWINS Brokerage Division and bringing an expanded geographic presence to complement the existing AmWINS platform. In March, AmWINS and General Star Management Co. partnered to launch a food delivery insurance program through its General Star Programs Unit.
Last year was also a busy one for AmWINS, including the announcement nearly year ago that it had secured backing from Berkshire Hathaway International Insurance Ltd. for its London-based managing general agent, Unicorn Underwriting, to write motor fleet business.
Following the deal with Networked, things are going to be “business as usual,” according to Purviance.
“We don’t want to disrupt the relationships with the retail clients, but we’re going to be working very aggressively over the next four to six weeks to roll out the best initial step at providing products to both client bases,” Purviance said. “Then you’ll see us continue to build out more from a geographic and technology standpoint to support those roll outs down the road. But day one, we’re here not to disrupt what either operation has built, and put the retail client first.”
For Networked, this is a chance to grow beyond California and its offices in Grass Valley and Orange.
“I’ll mention, we have already, even prior to announcing this acquisition, had been focused on expanding our footprint,” Biancardi said. “We are predominately in California and, to a lesser extent, in some other Western states. We’ve been looking expand that footprint. This really gives us a lot more resources and a quicker and really more robust way to expand across the country.”
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