Totalis’s BlueSkyRisk launches $10mn+ builders’ risk program

BlueSkyRisk has launched Tower Construction Risk, a $10mn+ builders’ risk program led by former Westchester executive George Delatorre, marking the eighth program under the sub-brand of Aon-owned NFP’s Totalis platform, Program Manager can reveal.

Tower Construction Risk has been in the market since at least September, and plans to initially have a distribution footprint limited to around 10 wholesale broking teams with specialist builders’ risk expertise.

The new program is backed by Los Angeles-based Knight Specialty and South Lake Specialty in Texas, which have put up a collective $10mn in capacity. BlueSkyRisk is also in the final stretch of negotiating with a third carrier to provide an additional $5mn and has ambitions to get to $25mn by the first half of next year.

South Lake provided support for the program via the Accelerant Risk Exchange, while Knight Specialty participates across other BlueSkyRisk programs.

Tower Construction Risk’s management team has also been developing a lead policy form it may look to use on some projects, after an initial launch with follow-form quota share capacity.

“We'll launch with $15mn. We're wholesale, quota share right now and probably by Q1, Q2 of next year, we'll have a lead form. We hope to build up to about $25mn in capacity for the wholesale frame space,” BlueSkyRisk CUO Ryan Murphy explained in an interview.

He added that Tower Construction Risk has ambitions to capitalize on its relationship with Aon and NFP and launch a smaller-limit product through the retail channel.

Murphy said it took about eight months to build capacity and to launch the de novo program, after beginning discussions with carriers in January, which carried on through the Target Markets mid-year meeting in Tampa.

Tower Construction Risk’s initial appetite is for up to $150mn in total insured value, excluding Tier 1 wind risks, for the Howden Re-placed program.

“Once we build a solid premium base we hope to build out more guidelines, and either pursue some additional reinsurance on that front to be able to offer a Tier 1 on frame or across all construction types,” Delatorre commented.

Tower Construction Risk will look to increase headcount as submission counts and premium volumes grow, with Delatorre pointing out that “there's probably nothing better in this market than a responsive underwriter”.

Murphy said BlueSkyRisk has “done a good job” in building customized raters for programs that generally make its underwriting “as low touch as possible”.

“[We’re] trying to keep the book as low touch for George as possible so that he can get through submissions a little quicker,” he added.

Without being able to offer Tier 1 wind coverage initially, Murphy said that Tower Construction Risk doesn’t have “aggressive” initial premium projections, suggesting it could write around $35mn in premium the first year.

“Our expectations were not to build Tier 1 capacity in year one, and I think both George and I agreed that we would like to get that premium base in and solidified before we branched out,” Murphy added, while also citing the elevated storm season forecast as one reason for its initial conservatism.

“From there it just depends on how the capacity builds. If we get up to that $25mn of capacity, I think we're definitely in that $50mn to probably $65mn [premium] range, obviously allowing for changes in market rate and capacity structure.”

BlueSkyRisk was founded in 2014, and Murphy touted the infrastructure that Totalis Program Underwriters provides, including actuarial resources, as making it easier to get a new program off the ground.