Managing general agent (MGA) Horizon (UW) has made all of its employees, including directors, redundant, with the business set to no longer have an underwriting partner from 31 January, 2024 and “not enough time” to sell the business or find new capacity.
In a message to brokers, seen by Insurance Business, the high-net-worth (HNW) MGA cited high levels of inflation over the last 12 to 18 months as having driven growth “outside of budgets and plans”, and alleged that Pen Underwriting had issued it with notice “out of the blue” six months into a three-year contract as Horizon had become too large a proportion of Pen’s business with Aviva.
In the message from the directors, the HNW MGA claimed that it had been unable to secure a “meaningful or workable extension” from Pen, leaving it with “not enough time to find a new partner or sell the business”.
“Growth is clearly positive, but it has placed us in a difficult position, in that we have become too large a proportion of Pen Underwriting Limited's business with Aviva. 2023 has shown how difficult it is for an MGA to operate in the MNW and HNW arena, with rising reinsurance costs, claims inflation, increased weather events and continually moving loss ratio targets,” Horizon directors Mike Webley, Wendy Travers and Paul Davies said in the email to brokers. “We have also had a contested legacy claim deteriorate which was completely out of our hands.”
Responding to the emailed release, a spokesperson from Pen Underwriting stated that Horizon (UW) was notified back in September and that “in order to assist Horizon and its customers”, Pen had subsequently granted an additional month’s extension to the contractual period of notice.
“As an underwriting business,” the spokesperson for Pen said, “Pen is committed to writing profitable, sustainable business for the benefit of our brokers, their customers and our capacity providers. As such, we closely track and continually review the performance of our many diverse portfolios and binder arrangements.
“In response to the current challenging market of increased reinsurance costs, severe weather events and claims inflation, we have made some changes to the risk appetite and distribution partners across our UK homeowners and property owners business based solely on the performance of the underlying coverholder and broker portfolios.
“Whenever it is necessary to make changes, we do so in line with the contractual arrangements we have in place with the relevant coverholders and brokers.”
Horizon is able to incept new business up to 31 December 2023 and renewals up to 31 January 2024, brokers were informed.
The business is said to be in “advanced conversations” with multiple parties over a renewal rights solution.
“We will update you all further on this in the coming weeks – but rest assured we are doing everything possible to secure an arrangement for Horizon clients,” the directors said.
All employees of the MGA, which has 12 members of staff listed on Linkedin, have been made redundant, including directors, brokers were told.
In the email to brokers, the directors said: “We are completely devastated and all Horizon employees, including directors have been made redundant.
“To launch this business, to see it grow and to work with you all has been an utter privilege and we thank you all for your support and understand that this will create some problems for you – but please know we did everything within our power to mitigate this, but we were not given the time to find a new partner.”
The MGA directors thanked its staff and urged other businesses that may be recruiting to reach out to Horizon team members.
“We all put everything into this business but changing marketing conditions, changing risk appetite and a lack of time has meant our journey is coming to an end – we will all be around to answer any questions you have – we are very sorry and thank you,” the directors signed off.
Webley declined to comment when approached by Insurance Business.
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