Capacity Issue: Niche Scheme with nowhere to go..

Losing capacity can be a real challenge, especially in very niche markets.

CLIENT:          Broker

CATEGORY:   Schemes and Consoldiations

TOPIC:            Loss of capacity for a niche scheme.

Overview

We were approached by a broker who had a significant amount of business in a niche market, where capacity was going to be withdrawn. This was not due to the performance of the scheme, but merely because the carrier had a change in appetite and was no longer writing this line of business .

Problem

The scheme was operated under a Delegated Authority from the insurer, and the broker was keen to have some continuity of the levels of cover, using a leading A rated carrier, match his already keen rating and have as little disruption as possible.

SWOT

The broker is a leading expert in this market, but the withdrawal of capacity caused a significant challenge for the business, as without being able to match cover or premium may have caused a loss of business, reputational damage or at the very least significant increase in administration placing business 'open market'.

Solution

After a thorough analysis of the scheme, with excellent MI from the broker, we presented a business plan to a panel of insurers, who we knew would show suitable appetite for the business, highlighting the excellent COR of the scheme over the preceding 3-5 years, and the strength the brokers expertise in the field.

Conclusion

We received positive responses from several insurers, and specialist MGAs, some providing (DIC & DIL) to ensure that the cover continued to provide wide limits, proving an element of delegated authority, and noting the excellent COR a smooth transfer of the book.