RedBird-backed Bishop Street working on pipeline of M&A and start-up MGAs
Bishop Street Underwriters has a pipeline of M&A deals and de novo MGAs in the works as it targets entrepreneurial talent for the rapid buildout of its platform with the support of private equity backer RedBird Capital, Program Manager understands.
Launched last year, Bishop Street describes itself as an acquirer and program incubator that combines established businesses’ brand equity with best-in-class capabilities, capital and resources to build a “powerful growth platform”.
It is led by former Aon Affinity chief strategy officer Chad Levine and ex-Guy Carpenter managing director Chad Weber.
Earlier this year, Bishop Street entered into a partnership with Topsail Reinsurance to provide reinsurance capacity to potential program and MGA partners. And in September, it announced another strategic partnership, this time with Skyward Specialty Insurance Group to support both existing program expansion and new launches.
Also in September, Program Manager exclusively reported that Bishop Street had been linked with a deal to acquire Conifer Insurance Services, a transaction the firm subsequently confirmed, and one that marked its entry into the commercial lines segment.
Although Bishop Street is largely focused on building a diversified portfolio of commercial lines MGAs, the platform will also be opportunistic when it comes to differentiated personal lines entities.
That became apparent late last month when Bishop Street made a strategic equity investment in full-service auto insurance MGA Verve Services.
As reported by Program Manager at the time, the Verve deal marked Bishop Street’s entry into specialty private passenger auto.
Topsail and Skyward partnerships
Talking to this publication, Weber said Bishop Street’s strategic tie-ups with Topsail Re and Skyward Specialty are “a value differentiator” for MGAs that his firm is looking to potentially acquire, or partner with.
“It brings an additional capability,” Weber said.
“Topsail, being a reinsurer, can provide capacity behind the deal [and] Skyward being an admitted and E&S carrier that actually has paper that can be issued on – it just provides a different capability in the marketplace for us.”
Bishop Street already has a handful of MGAs operating on its platform supported by capacity provided by carriers other than Skyward Specialty.
As Weber was keen to point out, the Skyward Specialty partnership “is just an additional offering that we have on the platform”.
The partnership “doesn’t guarantee that any of them will be on Skyward [paper] or be provided capacity by Topsail”, said Weber.
“It's just something that we can bring to the table to offer an option of in-house capacity.”
Weber said where those capacity deals will probably be most impactful is on team lifts and for entrepreneurial underwriters who want to join Bishop Street and launch new platforms.
“We've got capital at the ready to get those conversations started, and it should be easier for us to start relative to our peers who have to go out to the broader market and have those conversations,” said Weber.
Business line agnostic
As it grows, Weber said Bishop Street is “very agnostic” on the types of programs it will add to the platform.
“It really comes down to people with strong underwriting results who are focused on being able to survive market cycles,” he said.
They should have niche expertise, the knowledge base and capabilities to manage a sustainable program over the long term, he added.
“If you have capacity partners that are sitting with us side by side, we've got to have underwriting teams that are focused on bottom-line profitability, not just top-line growth,” Weber stated.
Bishop Street does not have any minimum premium volume thresholds for its programs.
“We have general aspirations, but I think it really just also depends on the line of business,” he said.
“The premium volumes in large property are very different than [for] small SME business, so it just depends on the opportunity. And how we think about those opportunities is going to vary upon the business plans that people bring.
“It's more a conversation of what's achievable and what makes sense than it is ‘you've got to get to X bar by year two in order for it to make sense’.
“It's really about how does it fit into the overall portfolio, and how does it build up together to make sense as a platform.”
Bottom line focused
While Bishop Street is broadly open-minded about the types of business it will take on, Weber was clear that the company is “not interested in people who are trying to find a new home after burning papers elsewhere”.
“It’s got to be long-term results, and people who have a track record are the folks that we're looking to support. Things that are extremely volatile are probably not as interesting, just because having consistent and stable results is definitely a better partnership with capacity.”
When it comes to the types of individuals and MGAs that Bishop Street wants to partner with, Weber said there are several groups of interest.
These include individuals or teams with established MGAs that are looking to partner with a platform like Bishop Street to grow their capacity, expand their distribution, increase their capital or bolster their technology.
Those, Weber said, “are absolutely in our wheelhouse”.
At the same time, “folks who have had a long history working in a carrier, tons of experience and a following in the marketplace also create a great opportunity”, he added.
Bishop Street, Weber said, “can be great for them” because it can provide direct equity into that new MGA business, help them get launched with capacity, provide all of the back-office support they need, and give them more control over their future.
RedBird backing
As Bishop Street looks to establish a foothold in the market, it will do so with the backing of RedBird, a private equity firm that Weber said has “incredible expertise in the financial sector, specifically in the insurance space”.
RedBird previously owned Constellation Affiliated Partners before the Bill Goldstein-led business was sold to Truist in 2021.
“[That] was a big draw to us when we were out there hunting for a capital backer – somebody who had direct experience in the insurance space,” said Weber.
“They did an entry, a very successful exit, and they’re incredibly knowledgeable in the insurance space. They sit side by side with us as we're building out Bishop Street, and are a phenomenal partner for us.”
With RedBird’s backing, Weber said there is scope to undertake M&A, as evidenced by the Conifer and Verve deals.
However, he said Bishop Street is a builder of business, and will not acquire one of its large competitors that has already undertaken M&A and team launches.
“But certainly things that can tuck in easily and which see the benefit of partnering with someone like us to help them succeed and get their business to the next level – they’re the people that we're looking to partner with.”