NEWS

Fronting carrier Clear Blue expects to grow annual gross written premium by around 28% in 2020 to reach $750mn, as the hardening rate environment and new programs bolster its top line.

“We are very bullish on our business,” founder and CEO Jerome Breslin told Inside P&C, adding that the firm was having a “great year” despite the Covid-19 pandemic.

The CEO projects that by the end of 2021, Clear Blue will have an annual premium income of between $900mn and $1bn.

The figures put the firm in touching distance of State National, the Markel-owned fronting carrier, which wrote $847mn in direct written premium last year and is widely considered the market leader in the space.  

Fronting carriers offer MGAs underwriting capacity, which is then ceded out to the reinsurance market. MGAs that write on Clear Blue paper include Orchid, QEO Group and Openly, an InsurTech. 

The model helps reinsurers diversify their books of business, giving them access to lower volatility primary insurance risk. The structure also benefits MGAs by giving them a more stable source of capacity – even if individual reinsurers come and go, the program can continue unaffected. Reinsurers also have more appetite for higher limit programs than individual primary carriers.

Clear Blue’s reinsurance partners in 2019 included Swiss Re, Qatar Re, MS Amlin and Munich Re, according to data from public filings, accessed through SNL. 

“We just added Chubb on two transactions,” said Breslin. “We continue to work with the biggest (re)insurers in the world.”

Breslin agreed that reinsurance capacity was becoming harder to come by amid the squeeze in retrocession capacity on carriers.

“There’s no question the terms are getting tighter, the terms are not what they were,” he said.

He described his company’s book as leaning towards casualty risk, where rates are rapidly hardening.  

Discussing the current outlook for the insurance industry, Breslin said: “It’s a strange environment, a lot of activity.” 

“Folks starting up, new money is coming in, which might snuff out whatever hard market there is”.

Clear Blue was founded in 2015, by Breslin, a former AmTrust and Bank of America executive.

The company is backed by the private equity firm Pine Brook.