Pioneer Underwriters has completed an exercise to examine its optimal strategic and capital options for 2020 and beyond, the company has announced – and now changes are afoot.
“Pioneer’s core operations, the underwriting services business (MGA), has been remediated to provide increased focus on business where Pioneer can provide differentiated value through expertise and distribution,” the company said. “This work has resulted in a withdrawal from certain lines of business over the past 12 months, which has been communicated to our stakeholders, and the results are already encouraging.”
Pioneer has decided not to proceed with one of its capital platforms, Pioneer Syndicate 1980, next year. While underwriting performance at the syndicate has significantly improved, Pioneer said that the cost of capital within the syndicate structure is not economically efficient compared to its other capital arrangements. Pioneer will work with Asta, the managing agency of Syndicate 1980, to ensure that run-off of the syndicate is achieved smoothly. Pioneer will also work with brokers and clients to facilitate business transfer to replacement capital providers.
Pioneer underwrites on behalf of more than 20 capital providers offering diversity of capital across its facilities. The company said that renewal of these facilities is currently underway. Pioneer plans to write more than £200 million (about US$258 million) in gross written premium next year.
The company said that it continues to work with Canaccord Genuity as it explores capital options for future growth, and is currently in discussions with a number of potential investors who are attracted to the underwriting services organization.
“As a result of this work, Pioneer is leaner and focused on providing the value to capital necessary to generate superior returns through the core underwriting services platform (MGA),” said Andrew McMellin, Pioneer group chief executive. “In our view, customers, employees and shareholders are better served by Pioneer as a focused underwriting services organization, and we look forward to a successful 2020.”
