How one broker is making lemonade out of property insurance disruption

At a time when many insurance carriers are shrinking their capacity or exiting the California property insurance market, one wholesale broker is charging in to seize growth opportunities.

“Over the past 12 to 18 months, and specifically now, we are trying to grow as much as we can in California,” said Daniel Feigenbaum (pictured), chief executive officer of London Underwriters, a wholesale insurance brokerage that specializes in writing admitted and non-admitted business for independent retail agencies in almost all 50 states.

The Florida-based firm has been around since 2010 but has mainly focused on its presence on the East Coast. For Feigenbaum, the availability crisis in California creates space for wholesalers to offer unique solutions.

“We feel that this is a very opportune time to help solve a lot of the problems for agents in California,” he told Insurance Business.

‘Three-bucket approach’ for the commercial sector

Feigenbaum was quick to offer a caveat: “We don’t do any personal lines business as a wholesaler, so we don’t have a solution for the homeowners’ insurance issue, which I know is a big problem in California.”

London Underwriters offers a variety of solutions for the small and mid-sized commercial space. Feigenbaum pointed to his brokerage’s “three-bucket approach” as a key differentiator.

“It’s one of those situations where we can be in the right place at the right time,” the CEO said. “We’re not just one thing or the other.

“We’re not just the binding authority, the brokerage, or the insurtech distributor. We have a marriage of all three, so that we can potentially find a home for most risks that are being submitted to us.”

Feigenbaum highlighted two offerings.

Three by Berkshire Hathaway

Berkshire Hathaway has “tremendous appetite” to grow in California, according to Feigenbaum.

“This is a noteworthy one, and a game-changer if we can get all the mechanisms correct,” he added.

Three is designed to cover small businesses in a simple and straightforward policy that’s three pages long. It includes property liability, commercial auto, and workers’ comp coverages in one bucket.

Feigenbaum said London Underwriters is working closely with Berkshire Hathaway’s team to develop a strategy that can help retail agents access the carrier’s capacity.

AU Gold

London Underwriters got its name from being a Lloyd’s of London coverholder, according to Feigenbaum. The insurance marketplace remains a strong candidate for placing commercial risks, which agents can access through the AU Gold platform.

AU Gold is an excess and surplus online program where agents can quote and bind builders’ risk, vacant property, and commercial packages.

“We still have very interested parties at Lloyd’s that want to diversify and grow their California book,” Feigenbaum said.

“We have very little restrictions in California for growth on the commercial property side. Subject to some fire risk restrictions that could apply to a particular zip code, they’re very much open in terms of a growth appetite for California.”

Creating solutions for traditional Main Street commercial businesses

If agents can’t find solutions within London Underwriters’ insurtech offerings, Feigenbaum is confident that the brokerage’s domestic binding authorities can fill the need.

“The third bucket is really related to some of our US domestic binding authorities,” he said. “So, these are the domestic insurers that are also very much inclined to grow their footprint on the West Coast.

“We think we have three different avenues that can help solve problems, and if the problem doesn’t fit one of the buckets, we have the ability to try the other two and so do our agents.”

As for appetite, Main Street mercantile businesses would absolutely fit within London Underwriters’ domestic binding authorities and insurtech authorities.

“For smaller accounts, for the guys that fit the Nationwide, Allstate, State Farm [risk profiles], all of that we can absolutely handle,” Feigenbaum said.

“I think it’s a result of us having spent the last three or four years developing both our insurtech distribution and our binding authority relationships.”

What are your thoughts on London Underwriters’ strategy amid the property disruption in California? Tell us in the comments.