CEO reveals firm's acquisition strategy
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5-Star Wholesale Brokers and MGAs - Monarch E&S Insurance Services
Bethan: [00:00:13] Hi everyone and welcome to Insurance Business TV. I'm Bethan Moorcroft, senior editor at Insurance Business. And in this episode, I'm delighted to welcome Derek Borisoff, CEO of Monarch E&S Insurance Services, which was recently named one of insurance business, America's five star wholesale brokers and MGAs. Derek, welcome to IBTV.
Derek: [00:00:34] Well, thank you. Appreciate the time.
Bethan: [00:00:37] Well, it's great to have you on the show. So to start off with, Derek, congratulations on Monarch being named one of our five star MGAs and wholesale brokers. What are some factors that you think are driving your success?
Derek: [00:00:51] Certainly, you know, none of this happens without a lot of hard work by everybody from top to bottom within our organization. Also, we have just experience and talent, talented underwriters, and that that contributes to to our success. That really is the backbone of all of our success having to correct and necessary market relations so we can offer the correct and needed products. It's a collaborative effort among all of our people to find the right solutions to whatever is needed by our retail brokers. We're problem solvers. And that in that arena and we have a young management team other than myself, we have a young management team that's very energetic and very engaged.
Bethan: [00:01:38] You know, since 2019, Monarch has grown into a leading MGA and E&S wholesale broker across the United States with the help of a few strategic partnerships. Can you tell us a little bit about your acquisition strategy and can you sort of share some recent successes that you've had in that area?
Derek: [00:01:58] Yeah, we we have a office in Massachusetts, which is now a monarch northeast. We have an office in Florida, which is now monarch southeast to better serve our customers in those regions of the country. We had a recent acquisition of Anderson & Murison, which is a California specialist wholesaler, and to bring us some additional products that will help our retail brokers.
Bethan: [00:02:25] So can we expect more M&A from Monarch moving forward? And if so, what are you looking for in an ideal partner for Monarch?
Derek: [00:02:33] Certainly, we're not we're not just acquiring people just for the territory or or just for the sake of acquiring operations. We really do want to bring value to to the table to our retail broker customers. That means we are looking for either individuals or entities that that have the right products that will help our retail customers have the expertise for those products to underwrite those products. And also that can bring the the markets with them for those products. So that really is what we're looking towards, is to bring some expertise in some exclusive products to the table.
Bethan: [00:03:15] One of your more recent partnerships with A&M in December 2021 enabled monarch's provision of exclusive personal lines products. I know this has been sort of an exciting development for you, so what opportunities is that acquisition opened up and can you share a little bit more on a macro level about your personal lines offerings?
Derek: [00:03:36] Yeah, Anderson & Murison is a great example that they as an entity I was very well familiar with. It was founded by somebody who was a mentor to me within the industry, Anderson & Murison and 65 year old MGAs. Primarily a personal lines play for us. They have some incredible expertise in the personal umbrella access liability, personal excess liability arena. So that was very interesting to us. Even though we already wrote and write a substantial amount of personal umbrellas and personal access, this will give us more clout in the marketplace, more expertise and some additional markets as well as specific products that that were specific to. Anderson & Murison. They have a commercial personal umbrella for insureds with lighter commercial exposures, such as owning an office building or owning an apartment building or a strip center, shopping center. It provides coverage for those exposures as well as whatever the personal exposure that individual insured may have. It provides a convenience of all this being rolled into one particular policy, and it's an exclusive product with one of our our carrier partners. And it's available in California and Hawaii and Massachusetts and New Jersey and Pennsylvania and Virginia. So that is a great offering to our retail broker customers.
Bethan: [00:05:11] That's great. Thanks, Derek. That's really interesting. Can you tell us a bit more about kind of your wider personal lines offerings?
Derek: [00:05:19] Yes. You know, personal lines is very important to monarch. Always has been. We are have always been active in the homeowners arena, which, as we all know, has become a lot more complicated product offering. So we have both high value and low valued homeowners offerings across the country. We write a lot of personal umbrella, always have written a lot of personal umbreallas. So we are able to provide solutions for high profile individuals, for senior drivers, for people with international locations in the personal umbrella, personal access arena, and also provide whatever limits may be required for for those individuals. We have a long time product for jewelry and fine arts. We're one of the leading writers for jewelry and fine arts, people with large jewelry schedules and fine arts schedules or any collectibles that they may have. So those are some of our mainstays in the personal personal lines area. As well as personal flood.
Bethan: [00:06:23] So Derek, you've mentioned that personal flood is a big focus for Monarch. Can you tell us a little bit about what you're doing in that arena?
Derek: [00:06:31] Sure. Personal floods become a very hot topic right now. The NFIP has changed how they are rating up their personal flood products as well as their commercial flood products. They have a new rating system. It's risk rating 2.0 and they're now rating off of modeling results. Their previous method was just off of flood zones and and elevation search. So this certainly is the way of the future, not just in flood, but many, many other lines of business. And this modeling will provide the the true risk characteristics and hopefully the correct pricing that goes along with it. What experts have been saying for years is that the old system was providing a false sense of security for insurers. They thought that if they were in a low risk zone, such as X zone, then they may not have even needed insurance or the banks may not have even required them to carry flood insurance. Turns out that was certainly false or proven to be false. For the storms such as Ida in the Northeast, 60% of those, those flooded businesses and homes were were in lower flood rated areas. And and so that model or that way of rating it up proved to be a problem. So this is going to provide the opportunity for conversation between insurers and retail brokers to figure out what what their true flood exposure is. And this is opening up the competition from the private flood markets. So retail brokers should be searching for four experts in this. In this arena, we have found that over the years that that many wholesale property brokers really don't know a whole lot about flood. We're lucky to have a flood expert in our Matthew Romano. That's all he does. And he's got the private flood markets to to offer to our retail brokers. But more importantly, that he has the expertise to to guide him through this process, determine what that actual exposure is for their particular insureds, and obtain the best coverage that is available in the private flood market.
Bethan: [00:08:49] That's great. Definitely some good opportunities there with the changes that we're seeing in the marketplace. On that note, I'd like to build on that and look ahead, if you don't mind. Derek, what trends do you see in the E&S personal linespace for the rest of 2022, perhaps? And what are your sort of top priorities and opportunities going to be at Monarch?
Derek: [00:09:12] You know, the personalized marketplace is going to continue to be a tight marketplace. The homeowner's arena in the capacity in the homeowner's arena continues to be difficult. We just came back from Wistia and obtained a nationwide program to help assist in that homeowners arena. But as a result of that tightening on the on homeowners side, a lot of these policies have been broken up. Insureds have found themselves in a position of having to to have several policies that cover the exact same exposures that they they previously may have had and just one or two policies. So it is our job and it is our goal and it is our mission that we offer these other products that will help satisfy the needs of those insureds through their retail brokers. That's where the personal umbrellas come in. We can we can pretty much handle anything on a personal umbrella side. It comes across our table. That's where the jewelry and fine arts comes in, because that used to be covered all in one under one policy with some of the standard carriers on their homeowner's policies. Personal flood will come into play in there as well. So it is our job and we've been successful in developing these products, offering these products with the right carriers at the right price to satisfy the needs of these insureds and help help out our retail customers.
Bethan: [00:10:38] Thank you, Derek. I mean, it sounds like there's lots of exciting opportunities on the cards for Monarch. Once again, congratulations on your five star award. Thank you very much for joining us on IBTV.
Derek: [00:10:51] Thank you. Cheers.
Bethan: [00:10:54] Thanks also to our viewers for tuning in. I'm Bethan Moorcroft, senior editor at Insurance Business. Make sure you check out the rest of our TV episodes. IB Talk podcast and daily news at www.insurancebusinessmag.com/us. Thanks everyone.