Galanski lines up Lindsay Goldberg backing for 2021 hybrid start-up

Former Navigators CEO Stan Galanski has lined up private equity backing from Lindsay Goldberg and is working with a team of former colleagues and other industry executives on an E&S start-up that is likely to resemble a hybrid model with an MGA platform and access to its own paper, The Insurer can reveal.

Galanski left Navigators following its $2.1bn sale to The Hartford back in 2019 and set up a consultancy called G58 Capital.

He is also currently listed as an affiliate partner at New York-based Lindsay Goldberg, an investment firm with $17bn of committed capital across five funds, that describes itself as a “trusted and long-term oriented partner for family and founder-led businesses”.

In recent months Galanski has assembled a team of former Navigators colleagues and other senior industry executives under the G58 banner as he develops plans to launch a new vehicle.

The team includes former Royal Sun & Alliance group chief executive and Navigators chairman Bob Mendelsohn in a corporate governance and global insurance role.

Other senior former Navigators executives on board include Ciro DeFalco, who was CFO of the US-based specialty insurer before its acquisition by The Hartford, and reinsurance buyer Paul Kluga, who also worked under Galanski when he was CEO of Intercargo, which was bought by XL in 1999.

Former Navigators chief risk officer Diane Coogan, and former general counsel and chief compliance officer Emily Milner are on board, as well as LoriAnn Biggers, who was president of field operations and chief marketing officer at the insurer but has also been president of Lloyd’s America and held several senior roles at Wells Fargo and MMC.

MGA platform?

A noteworthy presence on the G58 team is Greg Wolyniec, the former president and CEO of Ascot US who left last summer with the arrival of Jonathan Zaffino.

The executive’s focus in the Galanski team is on strategy, the specialty commercial market, MGAs and programs along with M&A.

Sources said Wolyniec’s track record points to a potential dual focus for the start-up being worked on by the executives, which could see it develop an MGU/MGA and programs platform with its own underwriting teams as well as tie-ups with third party firms to target the fast-hardening E&S market.

It would also likely build out its own carrier platform, either through acquiring shell companies or a small-to-medium sized carrier acquisition, they added.

It is thought that potential underwriting teams have been identified that could join the MGA platform. Sources said business lines under consideration include casualty, umbrella/excess and construction, among other specialty lines.

The hybrid structure that marries a fee generating underwriting platform with access to in-house paper supported by reinsurance panels is a growing trend in the US specialty insurance sector.

Recent examples include ReAlign Insurance Holdings, which has built an E&S and admitted platform with program underwriting management and claims administration services provided by affiliated MGA platform Align General.

Ambac this week officially launched its Everspan program participatory front carrier platform and is also building out an MGU arm.

Another variant of the model has seen Accelerant launch in the US this year as a program carrier platform that will also invest in member MGAs.

Meanwhile, Applied Underwriters has been building out its MGA platform in addition to its own carrier business with a series of high profile team hires.

Carrier acquisition?

Sources have also suggested the Galanski-led proposition will pursue its own carrier platform, either through a shell or small to medium-scale carrier acquisition.

Securing a viable – and affordable – insurance company platform has proved to be one of the biggest hurdles to new capital and seasoned management teams looking to enter the sector quickly to take advantage of highly attractive pricing conditions for commercial business.

That has led to a number of approaches, including new Lloyd’s syndicates in London to access US business (Mosaic), the scale-up of existing domestic carriers (Core Specialty), in addition to de novo plays (Vantage).

Even those looking to build out their own de novo insurance platform are expected to initially utilise fronting capacity to begin building underwriting portfolios, given the lead-time in the regulatory and ratings agency process for a new carrier.

There have also been a number of small E&S focused carrier start-ups either just launched or in the works, including Upland Capital Group and LIO Insurance.

Details of the exact strategy being deployed by Galanski and his team are not known at this stage.

Navigators itself has its origins as an MGA/MGU, set up by Terence Deeks when he formed the company in the mid 70s. It then morphed into a carrier first with a syndicate then a fully-fledged US insurance company.

Galanski did not immediately respond to a request for comment on this article.

The Insurer comment

Stan Galanski’s hybrid start-up project may still have a way to run before it launches, but the former Navigators CEO has already assembled a high profile team at his consultancy firm.

It includes several former colleagues from the US specialty insurer that was sold to The Hartford back in 2017. The question is whether Galanski will look to get the gang back together in a more meaningful manner by turning to his former shop for underwriting talent.

Key to executing the start-up plan will be securing paper. Although specialty carrier platforms are a scarce commodity in the US, there are other options, including shells, or partnering with the growing league of fronting companies – although the value is likely to be in keeping the paper in-house.

Galanski has the track record of growing businesses. During his time as CEO at Navigators the company grew from $150mn of premiums to $2bn of premiums.

He has tailwinds of a highly attractive E&S market behind him. The challenge will be speed-to-market with paper and a platform to capitalise on the environment.