Pen Underwriting has its sights firmly fixed on the North Star of becoming a £1 billion GWP underwriting business by 2025. Yesterday, it took a further stride in that direction, acquiring Tay River Holdings and its wholly owned marine specialist subsidiaries – Vessel Protect, Trafalgar Marine Trades and BMM Ports & Terminals.
Speaking with Insurance Business UK, Tom Downey (pictured), CEO of Pen Underwriting noted that the deal, which brings on board more than £90 million in GWP and a 17-strong team of specialist underwriters, has been in play since October 2021. Ongoing conversations soon revealed the cultural alignment between the firms, he said, particularly given the teams’ shared focus on looking after loss ratios, being passionate about underwriting and having a truly entrepreneurial spirit.
“From our side, we got to know Pen through Gallagher Specialty,” said Paul Hartley, founder and MD of Tay River Holdings. “Some of the brokers we deal with there started to tell us about Pen and what they are doing and we were really impressed with the business they are building. And the capabilities they have as a virtual insurer really spoke to us at a time when our business was growing and building and we were looking at how we could develop to that next stage.”
Chris Goddard, founder & CEO of Vessel Protect, also touched on the capabilities, resources, and strategic and cultural alignment that Pen brought to the table. All of those factors will add significant value to what Vessel Protect and the other marine specialist subsidiaries currently offer, he said, but it’s also about what having the power of Pen behind them can bring as they grow their marine offering in the future.
“Part of the attraction of the deal is the culture of Pen being an underwriting business led by underwriters who are empowered to make decisions to help grow and develop that particular niche business,” he said. “And as we look to the future, as we look to expand our marine offering, we’re looking for similarly entrepreneurial-minded individuals to come on board and grow the business.”
Adrian Scott, MD, international & financial lines at Pen Underwriting, added that Pen and the businesses under Tay River Holdings – which are now trading as Pen Underwriting Ltd – have a shared hunger for growth and a shared vision for distribution. Like the onboarded businesses, Pen also wants to grow further internationally, he said, and will look to achieve this by pursuing both traditional underwriting growth and a digitisation strategy.
Exploring what that growth will look like, Goddard noted that the acquired businesses will look to continue to enhance their current offering while diversifying into new product lines and expanding their digital platform.
“When we sat down with Tom, in the first meeting, we had the same idea in terms of capacity,” Hartley said. “Every pound of the capacities money is like our own money, and therefore we will never grow for growth’s sake. While we’ve had a pretty steep trajectory within Tay River Holdings in terms of our GWP, this is built on the decades of experience in our business as Lloyd’s underwriters.
“So our niches and our product lines, we’ve had those [for years]. Really Tay River Holdings was the culmination of a lot of work. And when the market conditions are right, and it’s right for us to use our capacities’ dollar, we will use it. But when it’s not, we won’t just grow for growth’s sake.”
Entering the specialist marine market with the deal was a natural next step for Pen in its own evolution, added Scott. It was an area that the business has been looking at for some time, and having previously had no presence whatsoever in the market, the opportunity to come together with Tay River Holdings and its great team was too good to pass up.
At its core, Downey said, doing the right deal really comes down to having the right chemistry. It’s about bringing on board talent that has great leadership capabilities, which he noted Hartley and Goddard both have “in abundance”. It’s a truly exciting deal for Pen, he said, and one which he firmly believes will lift the underwriting business even higher.
“This is about a mutual joining together,” he said. “It’s not one team joining another team, rather they’re lifting each other up, building new products, building new niches and looking for new ways to disrupt the market. And they’ve done a fantastic job with that already in terms of the people they’ve brought on board.”
Having met with the Tay River Holdings team last Friday in their Lloyd’s offices – which will remain their base of operations for the foreseeable future – it was great to see their energy, he said, and to see how engaged they were with taking the next step in their professional development.
“I’ve said it before but the most important thing is having people who are happy in their job and people who are determined to achieve and succeed,” he said. “My job and the job of the rest of my team is to enable that to happen, to let people build their careers. And we look forward to the team growing from 17 people to 35 people to 50 people. That’s what we’re here to do. That’s what the mutual coming together of these teams is all about – building and creating something much more than we have here today.”
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