Meet the MGA: Spring Insure

When did Spring Insure start trading?

We started trading in mid-2020 with our initial focus on the Beazley financial institutions capacity in London which we had arranged before we even had an office. So that’s how we kicked things off. Getting capacity then was quite a significant achievement given many MGAs were struggling to get access to new capacity. Indeed in the sector we operate you had quite a few players pull out such as Argo and Axa, while one or two MGAs had a capacity hiatus, so the timing was beneficial for us.

How did Aston Lark get involved?

We set up a joint venture with their management; and the Beazley capacity deal was very much part of the blueprint that demonstrated [to them] the proof of concept that we had worked, especially given the amount of data we had. So we are a JV, but we have our own office and branding. Being part of Aston Lark as was, and Howden now, brings significant advantages, but if we do what we say we are going to do then [the oversight] is pretty light touch.

Your launch tied in with the acquisition of Guernsey-based Neon Sapphire underwriting, why did you do that deal?

The people at Neon Sapphire were long-term friends and colleagues so that made the conversation with the parent Neon easier. We were negotiating [with them] at the time [of Spring’s launch]. In fact we were actually in due diligence but everything was taking longer at that time and the acquisition closed in January 2021.

Do you have other acquisitions planned?

Realistically acquisitions are a fairly scarce commodity for us. They would have to meet a certain set of requirements because we are not in the business of EBITA arbitrage; we are in the business of buying profitable GWP. So we are more likely to hire an individual or a team; but if we could find another Neon Sapphire to buy then fantastic. But that was a rarity in that it had all the features we hoped, plus a willing seller because they had decided it was non-core.

You mentioned ‘a blueprint’, could you expand on that?

I wish I could show you the original blueprint for Spring because it was written one or two years before we launched. But if you look then at what we said we should focus on, every time I read an article about an MGA now they repeat back the same things we outlined. Which is principally capacity/carrier alignment with easy to access live information for partners. So we were already switched onto how Spring should operate when we could get the capacity.

How has the business evolved since launch?

We’ve hit various milestones since buying Neon Sapphire, including adding more insurers and new lines such as commercial D&O and cyber. The most recent move was the recruitment of Paula McManus who joined us on the 3rd October. She is someone with over 30 years experience who has come on board to set up our commercial professional indemnity team. We have some capacity already and this quite a big move for us. She has been joined by one employee so far and we aim to grow that team significantly over the next 12-36 months. PI is such a big market and we need to be in it properly so this is a significant move for us.

Has everyone gone as expected since 2020?

Nothing ever goes completely to plan; and that was the same here. There are lots of things we can point to that we have achieved, many of which I have already mentioned, alongside setting up our European operation in Dublin in the summer. What I would have liked to have done is achieved some of those new product extensions and capacity deals quicker. But even though the environment is better it still does take time to secure capacity which is a plus and minus.
Because if it does take time that often signals a more solid relationship, and we rely on the long-term personal relationship with our capacity providers.

There has been a lot of talk about a capacity crunch. How are things now compared to two years ago?

June 2020 must have been a low point in terms of capacity available. But this year you have seen a lot of new MGAs launched with capacity that had not previously supported MGAs, so I would say the environment that exists now is on a good footing.

In terms of your core markets what does rating remain hard or are there signing of softening?

The PI market is still hard, with negative predictions linked with the [expected] recession, changes in interest rates and things of that nature; so that remains on the harder side. If you take commercial D&O inevitably when capacity comes in that is the first one to show signs of softening and it is well understood that is the case; but you need to look at where it was before.

If you look at financial institutions, the mid to small-sized businesses we do, we saw a shortage of capacity but not massive rate hardening; it was sensible and, therefore, it has also been sensible on the way towards softening.

How would you define a good Spring employee?

You have to make an assumption they will have a certain level of technical ability; and then we are fans of grafters because we consider ourselves grafters; so we like people who want to get stuck in and who are ambitious, enthusiastic and understand the different stakeholder relationships we have whether it is brokers or capacity.

Are you looking to expand the UK footprint of Spring outside London?

I don’t like the phrase regional business, but in respect of non-London market business there is a huge world out there. In this day and age it does not matter so much about where you are located; but if we saw an opportunity somewhere else in the UK to open another office we’d be open to the idea. But we are trading with brokers around the country presently with what with have got [in London]. So if they don’t mind, we don’t mind either.

And can we expect further product diversification?

There is a lot we can do in financial and professional lines as it has a very broad scope. What we are not going to do is go into another business area just for the sake of growth. We are not a big company, we are 25 people, growing quite quickly, so any growth we go for has to be on a solid footing.

How many brokers do you deal with and what would your message be to brokers who have not reached out to you yet?

The number of brokers we deal with across our three offices would be more than 100 different firms. We are quite fortunate in that we manage all of our own compliance and related processes internally so getting a Toba with Spring is not as awful as it might be somewhere else. We want to make it easy to trade with us so my message to brokers would be get in touch, we are here to do business and if it is in our scope then we’ll give it a shot.

Finally, why are you called Spring?

We had a few other names but we decided they were a bit traditional so I know I made up the name, but I can’t remember the thought process behind it; although there was definitely wine involved. But we describe ourselves as fun, fresh and modern and that is the feel we are going for.