Velocity Danger Underwriters LLC, the managing common company (MGA) operation of reinsurance, disaster, local weather and climate risk-linked funding supervisor Nephila Capital, has paused accepting new owners enterprise in Florida, citing a need to manage its quickly grown portfolio within the State, we’ve discovered.Please observe: We’ve up to date this text to make clear that it’s only owners enterprise that Velocity Danger is pausing and the corporate stays very energetic in all industrial traces in Florida.
This isn’t an exit from the Florida market. Reasonably, having grown considerably in Florida’s property insurance coverage market lately, in market circumstances that Velocity says have been “difficult”, the managing common agent (MGA) desires to manage future development and so is not going to settle for new owners enterprise for the remainder of this yr.
Nephila Capital launched its MGA Velocity again in 2015, because the insurance-linked securities (ILS) funding fund supervisor sought to ascertain environment friendly routes to entry disaster uncovered property dangers extra immediately.
Velocity was constructed to offer an environment friendly pipeline to provide Nephila Capital extra direct entry to threat and a extra environment friendly strategy to deploy its reinsurance capital to assist this new major enterprise.
One thing that proved significantly efficient within the Florida market, the place Velocity has grown its portfolio quickly.
Velocity mentioned that its buyer base has grown “past expectations” in Florida, main it to the choice to manage future development throughout its private traces merchandise for the remainder of this yr.
The MGA mentioned that the choice was not taken evenly and that Velocity stays dedicated to the Florida market.
However with the intention to assist owners and brokers in Florida, Velocity feels it essential to pause new enterprise to handle its portfolio responsibly, whereas avoiding market circumstances that it calls “unstable”.
In addition to not offering new quotes for its owners merchandise, Velocity may even non-renew its Flex property insurance coverage product for older houses, or smaller restrict insurance policies, we perceive.
Velocity Danger continues to supply its industrial traces merchandise within the State.
This transfer seems to be partly as a consequence of Velocity’s owners development in Florida and in addition partly as a consequence of market circumstances, with the Florida property insurance coverage market remaining severely challenged by a spread of points.
This has led to different carriers pulling-back on the state, so it’s maybe no shock to see Nephila Capital’s Velocity MGA changing into extra selective and cautious about over-exposure.
It might additionally sign the guardian, ILS investments supervisor Nephila, additionally contemplating its personal share of the Florida reinsurance market and the way that contributes to any focus of publicity to the State and to the nonetheless challenged insurance coverage market.