Client Case Study – Flux Syndicate 1985
Asta supports Flux to enable capital direct access to high quality, profitable risk at lower frictional cost.
Flux Syndicate 1985 – the ambition
Against a backdrop of growing convergence between underwriting, distribution and capital, insurance investors desire greater direct access to risk at a lower frictional cost. In response, Acrisure’s Flux Syndicate 1985 provides a diversified business model through which investors can access data-led, non-volatile, low-cost business that is highly accretive to Lloyd’s in terms of net operating expense, volatility profile, profitability and scalability.
Background
- Acrisure is the 6th largest insurance intermediary globally with $32 billion in premium of which $400 million currently flows into Lloyd’s
- Acrisure Technology Group is a strategic enabler to both growth and profitability
- Symbiotic relationship between Acrisure and the Lloyd’s market by taking the best of Lloyd’s product and plugging it into the Acrisure Retail distribution network
- Acrisure places $32 billion of insurance premium, concentrated in the US, with the ability to package the best quality business direct to investors
- Acrisure has bought high quality MGAs which have a demonstrable track-record and have aligned incentives with capital providers
- Acrisure has a long history with clients where it has data to prove certain areas are highly profitable.
Next Steps:
- Create a syndicate which would allow the market to better align capital to risk.
- The Flux low-touch underwriting model will take the best Lloyd’s products to new buyers through Acrisure’s tech-driven retail distribution systems, while expanding consortia opportunities for other Lloyd’s syndicates by easing access to the Acrisure retail network
- Symbiotic relationship between Acrisure and the Lloyd’s market by taking the best of Lloyd’s product and plugging it into the Acrisure Retail distribution network
- US SME Focus –WC, BOP, Commercial Package, Auto and GL
- International focus on SME Casualty, Specialty and Financial Lines
- Wholesale Vertical Integration – NCR 95% > 83%
- Retail Direct Access –single broker access to Acrisure SME portfolio
- Highly accretive to Lloyd’s in terms of both net operating expense and volatility profit
- Ability to scale business to $1bn over 5 years -meaningfully accretive to the Lloyd’s market
- Underwritten either quota share of lead market or Acrisure owned MGA –provides access to the Lloyd’s Syndicate
The Asta platform – delivering for all stakeholders
In May 2022, Acrisure began working with the Asta Business Development team and in September 2022, in principle approval was granted by Lloyd's to establish Flux syndicate 1985, which commenced underwriting on 1 January 2023.
January 2023 signalled the end to a detailed and complex process marking the end of a process which saw the Asta team deliver critical and ambitious speed to market in a matter of months.
Delivery
- Following several months of working closely together, Asta and Acrisure secured “in principle” approval from the Lloyd’s Council for the creation of Flux syndicate 1985 on 13th September 2022
- Syndicate 1985 is fully managed by Asta and final approval was secured to commence underwriting business incepting January 1st, 2023, following an Asta-led accelerated approvals process
- Establishment of Syndicate 1985 further enhances Asta’s credentials as a key partner for innovative new entrants to the Lloyd’s market
- Flux is expected to generate gross written premium of £106.7 million in 2023, of which 70% is new to Lloyd’s
- The Flux low-touch underwriting model will take the best Lloyd’s products to new buyers through Acrisure’s tech-driven retail distribution systems, while expanding consortia opportunities for other Lloyd’s syndicates by easing access to the Acrisure retail network.
Why Asta?
- Acrisure considered several managing agents.
- Having considered the relative capabilities of each Flux decided to select Asta. Ultimate selection predicated on:
- Reduced execution risk–this will give Flux the best chance of a successful launch and achieving business plan
- Comprehensive service offering –we will be outsourcing most services other than underwriting, pricing and technology
- Desire for independence – an independent managing agency will provide more clarity in termsof governance around the underwriting decision-making process.
Quotes
“The global insurance market is experiencing a growing convergence between underwriting, distribution, and capital. The Flux syndicate offers investors access to high-quality risk from multiple sources via the most direct route possible. We looked at Lloyd’s efforts to make the market more accessible, and easy to use, and we like what we have seen. With the help of Asta, we’ve created a leading-edge business model which will harness those facilities to the benefit of everyone in the chain, from the insured customer all the way to the ultimate capital provider.”
Grahame Millwater,
Acrisure President of Global Insurance
“The launch of Flux stands to increase that ratio dramatically and bring a large volume of new risk and premium into the market. It will accrue not just to Flux, but to other syndicates as well and will also provide additional opportunities for third-party capital. We’re proud to provide third party syndicate management to this exciting venture, which constitutes a ringing endorsement of Lloyd’s initiatives to make the market more attractive to high-quality, low-expense, entrepreneurial insurance players seeking an efficient platform for growth.”
Lorraine Harfitt,
Asta CEO
Highlights
News, views and insights
Acrisure receives Lloyd’s in-principle approval for Asta-managed Flux syndicate 1985
Read the press release >>
Asta is the leading third-party managing agent at Lloyd’s. We support a diverse range of businesses by delivering cost-effective underwriting management solutions tailored to your exact requirements and business lifecycle. Our goal is to help you achieve your ambition – of establishing a successful, profitable underwriting business.