London-based CFC Underwriting, one of the world’s largest independent managing general agents, serves more than 100,000 businesses across more than 90 countries – and is still growing.
Insurance Business recently chatted with Shannon Groeber (pictured above), CEO of CFC USA, about the company’s expansion, its intention to put more boots on the ground, and its middle-market focus.
IB: CFC appears to be on a growth trajectory. Can you talk a little about that?
Groeber: We have a team that has served clients that are looking for cyber solutions pretty much all over the entire spectrum, from small businesses – which is CFC’s core focus from when we started in 1999 – up to Fortune 10 companies that are looking for capacity. But the reality is, the strategy of CFC putting boots on the ground in the US over four years ago – and following suit in other areas – is to open up optionality and give more access to the brokers that are serving these clients.
[We want to] make sure that they've got decision-makers that are available in their local time zones, in real time. … So, recognizing how important it is, especially for middle-market clients, naturally, it just goes along with our strategy to put underwriters on the ground – starting in New York, but putting them in local time zones where the brokers can truly benefit from having decision-makers that are on the ground.
IB: Will that come with an increase in M&A activity or headcount?
Groeber: It will come with an increase in headcount. I'm hopeful that we'll have some announcements coming in the short term. But we'll start with a team that's purely focused on production, underwriting, and just grow that book organically. If we meet the expectations of the market – and do it in a way that I know is going to serve the brokers and serve the customers – I expect to see that team grow. We’re targeting three underwriters at the outset, and then hopefully adding more resources to that team in 2025.
IB: How about acquisitions?
Groeber: Historically, CFC has not been a very acquisitive company in terms of underwriting capacity. We, of course, have had some acquisitions on the incident-response side, both in the United States and Australia, and some other businesses that are conducive to our intention to be cutting-edge in terms of technology and use of AI and data insights.
We did just announce an acquisition in Australia of an underwriting business. … That's really, I think, the first true underwriting acquisition that we've made. … Australia is very exciting for us. It's been an area that CFC has really grown in a number of our products, and [we’re] just continuing to expand that reach.
We will have some more announcements to come and follow suit in other areas that have been key territories for us – Canada being one – so we’re not yet ready to share the details there. … And I would expect that we'll see some continued organic growth and acquisitions where it makes sense in additional key territories. Greater Europe is another area, obviously; we've got a massive staff in the UK, but there's no replacement for understanding the local needs, the local economies, and creating and cultivating those relationships with the brokers that are serving those territories.
IB: What made you pick the middle market as an area of focus?
Groeber: When we started the business in the US, it was focused on admitted cyber for small businesses – still a very unpenetrated market and one where there's a great need, but one that I think is not well-articulated to the ultimate customer. We added transaction liability in the US at the end of 2023.…
Ultimately, we look at the products where we feel very confident that we're offering something that is innovative, that's differentiated. We've got the products, the rating models, and the claims experience where we can offer something that is going to be of value. And in looking at the middle-market space and the parameters that we set around the admitted cyber product that was offered in the US, we could see much more demand beyond the parameters that we set for that product.
The admitted product is a great solution for a number of customers, but it's not going to be the right solution for every customer with the limitations on negotiating policy coverage. [We decided] adding middle-market cyber underwriters on the ground in the US would only enhance our proposition, not necessarily cannibalize it. It's not necessarily taking business away from the team in London, it's just making sure that we are able to serve all of the customers that are looking for capacity.
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