Volante secures revolutionary USD900m gross premium aggregate A+ capacity treaty deal
- A+ capacity provided for nine new underwriting teams
- Placement secured on a multi-year long-term agreement (LTA)
- Three global carriers form a strategic capacity panel to Volante
London, 14 June 2018 – Volante Global Limited (Volante), the new international managing general agent (MGA) platform launched in October 2017 following an investment agreement with its principal investor Nephila, has announced that it has secured a USD900m gross premium, multi-class, multi-territory A+ capacity treaty agreement.
The revolutionary agreement provides capacity for nine new underwriting teams which will work across seven distinct classes of business and operate in North America, Europe and Africa. The business lines include: Property, General Liability, Space, International Motor, Facultative P&C, Leisure & Sport, Financial Institutions, North America Auto and Professional Indemnity. The teams are scheduled to launch on the Volante platform in Q3 and Q4 2018.
The capacity has been provided by a strategic panel of three A+ rated insurers. The single agreement is secured on a multi-year LTA basis with zero arbitrage fixed commissions. Volante’s earnings will be fully contingent on profit commission which is in turn a calculation based on carrier performance over the period of the agreement. The contract is designed to ensure a long-term partnership with complete strategic alignment operating under a mechanism structured to optimise the combined operating result of the carriers.
The agreement between Volante and the carrier panel is underpinned by the MGA’s pioneering technology platform which ensures full transparency and connectivity. The system’s web-based portals provide each carrier with real-time management information across all seen, quoted and bound business spanning policies, claims, risk management and rating adequacy.
Commenting on the transaction, Talbir Bains, Founder and CEO of Volante, said: “This revolutionary capacity structure and agreement forms the foundation of Volante’s alignment to the carriers we serve. This single capacity treaty supported by a panel of three global carriers, supporting nine underwriting teams across an expansive range of classes and territories, is key to the objectives that we are committed to delivering at Volante – group culture, underwriting culture and an accretive insurance offering underpinned and enabled by leading-edge technology.
“What the transaction delivers in our view is a back-to-basics approach to the MGA-Carrier relationship. We have embedded within the commission structure of this deal a contractual alignment which necessitates that the underwriting profitability of our carriers is Volante’s primary focus in all aspects of the underwriting journey. This is about building a partnership predicated on complete alignment to the combined operating result of our capacity providers. Our commitment is to become an extension of their own business, operating with all of the guidelines, processes and controls you would expect from a market-leading insurance company – and with our superior technology advantage at the origin of the business, delivering margin optimisation through both operational efficiency and enhanced data and pricing analytics.”
The transaction was completed over a five-month period with the full support of the Global Portfolio Broking team within Aon’s Reinsurance Solutions business, which acted as the reinsurance intermediary, led by UK CEO Nick Frankland, Robert Sharp, Glyn Ridpath, Andrew Matson and Vijay Mavani.
Mr Frankland said: “We are delighted to have played a role in building this unique partnership structure between Volante and its providers, which we believe sets a new standard for the multi-class MGA model. By combining world-class capacity, leading sector expertise, and technology that enables business to be analysed and transacted quickly and efficiently, we feel that Volante is well-positioned to be a huge success.”
There are two underwriting teams already secured on the Volante platform with AA+ capacity on a multi-year agreement: Bridge Underwriting, a Stockholm-based specialist underwriting team operating across multiple P&C lines, and Edison Motor, a London Market-based team offering specialist commercial motor insurance products in the UK. A third team, Horizon which is a Treaty Reinsurance team based in Zurich, is scheduled to commence underwriting on the Volante platform in January 2019.