Steve Menzies, founder and chairman of Applied Underwriters Inc., reacquired his company from Warren Buffett’s Berkshire Hathaway in 2019. Since then, he has been buying businesses, creating new subsidiaries, welcoming new teams of professionals and growing his firm domestically and internationally.
Menzies and Jamie Sahara, President, have announced their goals for 2022 in a letter to stakeholders. Following what it termed a “pivotal year for the Company’s growth,” the leaders have set the realization of larger scale plans and the continued organic growth of the existing and newly introduced coverages and products as the two principal items on the corporate agenda.
According to Mr. Menzies, “While uncertainty, inflation and societal ills have created new resting and directional inertia inside and outside all of our business organizations, we were able to continue working almost at full throttle to add to our financial capacity, bolster our stability and add several new business units in the US and abroad.”
The Excess & Surplus lines (E&S) is a specialty market that insures things standard carriers won’t cover. Mr. Sahara observed that Applied remains somewhat cautious, but never fearful: “We consider the domestic, traditional admitted market to be way oversupplied. Primary carriers are not attaining adequate rates nor reasonable terms and conditions. Conversely, we view the E&S market as quite attractive in some segments, and we expect the E&S market to harden further before leveling off.”
Mr. Sahara continued, “Of course, E&S coverages are characteristically complex to underwrite. Continuing our successful efforts in 2021, Applied is well set to capitalize swiftly on changing market conditions and resulting opportunities.” A summary of Applied’s 2021 activities includes strategic acquisitions in niche sectors and the creation of new practices, including the transactions that follow Applied Underwriters…
– – acquired Concept Special Risks in February. Founded in 1999, Concept Special Risks, a Yorkshire, UK-based international MGA, is a leader in providing coverage for an extensive variety of nautical vessels and operators across the globe. Concept Special Risks is a licensed cover holder at Lloyd’s and holds a dominant market position in the US and Caribbean markets for motor yachts, trailer craft, sailboats, and catamarans covering both private/pleasure and charter;
– – completed its acquisition of Centauri Specialty Insurance in February. The Centauri companies (Centauri Specialty Insurance Company and Centauri National Insurance Company) based in Sarasota, Florida serve independent agents and brokers in 10 states: Alabama, Florida, Hawaii, Louisiana, Massachusetts, Mississippi, North Carolina, Oklahoma, South Carolina and Texas. The Centauri companies also offer private flood insurance in Florida, Hawaii, and South Carolina;
– – completed the acquisition of Oklahoma Property and Casualty Insurance Company in February. Applied sustained the Oklahoma company’s writing of admitted business in the South Central United States;
– – refocused its Texas Insurance Company in February for E&S Lines countrywide;
– – acquired the Florida Casualty Insurance Company in March; formerly Ashmere Insurance Company, the newly re-branded, Ft. Lauderdale-based insurer is licensed in 41 states;
– – acquired the insurance renewals to approximately 16,700 policies across Alabama, Louisiana and South Carolina from Gulfstream Property and Casualty Insurance Company and Gulfstream Select in February;
– – acquired Alaska Timber Insurance Exchange in the fourth quarter. ATIE is an Alaska-domiciled reciprocal exchange, organized to write non-assessable workers’ compensation policies in that state, and is set to conclude its conversion from a reciprocal to a stock insurance company, as approved by regulators;
– – created Applied Financial Lines, following the acquisition of StarStone’s core products in December 2020, with operations beginning early January. Applied moved into the EU and Middle East for Specialty Business from its Paris and Cologne offices to underwrite several specialty lines including professional indemnity and D&O through an extensive wholesale broker and local retail agent network throughout the EU, Israel and other countries in the region;
– – created Applied Specialty Underwriters in November 2020, with the new excess and surplus casualty unit launching in January to focus on general liability, excess liability and workers compensation for New York construction;
– – launched Applied Underwriters Aerospace in November, joining forces with the former PartnerRe D&F Space Team (Direct and Facultative). The new operation is based in Washington, D.C. with PartnerRe providing treaty reinsurance and other services as the enterprise expands;
– – inaugurated Applied Specialty Risk Construction Infrastructure in November, the Company’s new infrastructure and construction practice, providing alternative markets and options for the wide variety of business exposures in the construction sector;
– – created Applied Warranty & Insurance Services acquiring the US Specialty Lines Division of Generali Group in June, including Generali Warranty Services, LLC, a fully licensed obligor. Applied Underwriters has aggregated the Specialty Lines business into its newly formed Applied Warranty & Insurance Services division;
– – established Applied Fine Art & Collections in December 2020, which commenced operations in 2021 to create the preeminent global provider of coverage and risk management solutions for fine art, jewelry, collectibles, and collector automobiles;
– – expanded D&O operations in January under Applied Financial Lines in New York to provide a range of D&O coverages in the U.S; and
– – forged a unique partnership with Demotech in May to provide particular coverages for as many as 400 financially sound insurers, rated by Demotech, a top US insurance rating agency. Through the Applied custom program, Demotech-rated carriers are enabled to secure needed umbrella and excess coverages, providing a strong competitive advantage to the insurers for packaging and selling their primary coverages for small business insurance.
Mr. Menzies concluded, “We have added larger scale transactions into our pipeline, and we are hoping to close some bigger deals in 2022. Our Company’s strong work ethic has shown itself in our staff’s desire to stay at work and ensure that our enterprise coasts no more than forced by circumstances.”