‘Evolving’ Pen Underwriting has bagged a five-year cornerstone placement deal worth £550 million.
Led by top British firm Legal & General, the single quota share arrangement sees the consolidation of Pen Underwriting’s 15 UK household and SME portfolios – a move the underwriting business says is part of its strategic development as a virtual insurer. The placement will provide capacity for £110 million of annual gross written premium.
According to Pen Underwriting, creating a single ‘master’ binder simplifies capacity structure and will benefit not only customers but distribution partners as well. It cited improved trading efficiencies, quicker product-to-market delivery, and enhanced product and service offerings, as well as first-class security on a long-term basis.
“Launching this cornerstone placement for Pen’s UK household and SME business is a key milestone in our evolution as a virtual insurer,” said Pen Underwriting chief executive Jonathan Turner. “We’re delighted to have secured this meaningful, long-term capital commitment led by Legal & General, one of the UK’s most trusted brands.
“It is a strong endorsement of our model following significant investment in people, infrastructure, and governance; and marks the culmination of nearly two years of work to simplify our capacity structure and enhance the Pen proposition to deliver sustainability and security to our customers and distribution channels.”
Turner believes this will allow the business to drive profitable growth, both organically and through further acquisitions, and places Pen Underwriting on what he described as a “far stronger” platform.
“Legal & General is delighted to deepen our strong partnership with Pen as it continues to evolve its business and become the leading virtual insurer in the MGA sector,” commented Cheryl Agius, chief executive for general insurance at Legal & General. “The alignment of Legal & General’s capacity alongside the expertise of Pen provides us with the perfect fit as we look to expand our thinking and help to deliver great products and services to Pen’s customers.”
Agius said Legal & General is firmly committed to the partnerships sector, adding that the extension of its relationship with Pen Underwriting supports the former’s strategy to work with the right partners in order to roll out innovative and exciting insurance solutions.