FAIRFAX FINANCIAL HOLDINGS
Market Share: 2.85% Direct Premiums Written (Q1’14): $186.1 million Change (since Q1’13): -4.74% Ongoing merger and acquisition (M&A) activity in the E&S space continues to drive the growth of some carriers, including Toronto-based Fairfax Financial Holdings. Significant transactions for the Canadian company include its acquisition of First Mercury Group in 2011, and a more recent completion of the acquisition of American Safety Insurance Holdings in October 2013. The $306 million deal helped Fairfax grow its E&S presence in the US. Through subsidiary CoverXSpecialty, the larger Fairfax empire is active in the construction, specialty, life sciences, security, oil and gas, and transportation markets. CoverXSpecialty’s small business unit has also been successful, targeting smaller operations with large exposures that cause them to fall out of brokerage markets.
Market Share: 2.92% DPW (Q1’14): $190.7 million Change (since Q1’13): +48.01% Launched in June 2013 with the talents of four former AIG executives, Berkshire Hathaway Specialty Insurance has grown from zero premium to cracking the top 10 in just a year. The specialty division is now working with a team of 125 permanent employees and thousands of customers. Of course, Berkshire Specialty was always going to be a force to be reckoned with—particularly thanks to the impressive capital behind Warren Buffett’s insurance empire. “I think you’ve got to give quite a bit of credit to the Berkshire brand and to the capital,” says David Bresnahan, executive vice president of Berkshire Specialty Insurance. “I think that if we had taken our current team and attached ourselves to an average A-rated carrier, we would have just been another entrant in another crowded marketplace. “That capital also allows us to control our own destiny and be our own player. We’re a bit insulated from the external environment and things that other carriers are influenced by, so we’re able to commit to being a long-term, stable provider.” Bresnahan, who had previously been with AIG’s specialty arm, Lexington, also credits Berkshire’s
48 percent growth over the last year to the simple business strategy of providing quality customer service. Instead of relying heavily on market research when making decisions on new plays, Berkshire leans on existing knowledge of the practice leaders it hires and requests from its own customers. As such, the group is currently expanding into areas of life sciences, residential construction, builders risk, environmental casualty and surety. Looking forward, Bresnahan says to expect “much of the same” from Berkshire, with a good chance of international expansion to Asia-Pacific, Europe, the UK and Canada within the next six months.
CNA FINANCIAL CORP.
Market Share: 2.99% DPW (Q1’14): $195.1 million Change (since Q1’13): -8.11% Despite recent financial difficulties and continued job cuts, CNA Financial continues to hold its position in the top 10 market players in the E&S space. With a diverse risk appetite covering the likes of casino operations, grocery stores and alarm manufacturers, CNA Select Risk covers most specialty lines in the property/casualty market, having announced in February it will sell off its group health and life practice to streamline productions and improve profitability. The acquisition of Hardy Underwriting Bermuda Ltd. in 2012 also helped further CNA’s specialty lines focus and gave it access to the Lloyd’s of London marketplace. “We are delighted to be moving ahead with the transaction,” CNA Chairman and CEO Tom Motamed said at the time. “Hardy is a specialized Lloyd’s underwriter with a respected brand and a long history of disciplined underwriting. The acquisition provides CNA with a key platform for expanding our global business and accessing the $35 billion Lloyd’s marketplace.”
Market Share: 3.09% DPW (Q1’14): $201.7 million Change (since Q1’13): +36.05% Another relatively new and swiftly growing entrant into the E&S market, Ironshore Specialty boasts the second largest growth since the first SEPTEMBER/OCTOBER 2014 | 45
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