Nexus deal with Spectrum signals growth in APAC
Nexus Underwriting’s upcoming acquisition of a majority stake in a Dubai-headquartered managing general agent (MGA) highlights its ambitions to grow internationally—particularly in the Asia-Pacific region.
Nexus has agreed, subject to certain closing conditions, to acquire a majority stake in Spectrum, a specialist MGA focusing on marine and property insurance and reinsurance with a presence within the Middle East & North Africa and Asia-Pacific markets.
Colin Thompson, chief executive officer of Kentro Capital and of Nexus Underwriting, said: “This acquisition celebrates another landmark in Nexus’ vision of becoming a leading international specialty MGA and signifies the launch of Nexus’ Dubai platform.
“We are delighted to have found a partner in Spectrum that shares our ambitious culture and innovative spirit and which, like Nexus, has true technical expertise, service and underwriting results at the centre of its values.
“With Nexus’ institutional support sitting behind Spectrum’s management team and high growth track record, we see a clear opportunity to build a Nexus Dubai business underwriting in excess of $50 million in gross written premium,” he said.
“How do we do a better job at selling insurance?” Anthony Egerton, Nexus Asia
Speaking to Intelligent Insurer, Nexus Asia chief executive officer Anthony Egerton (pictured left) echoed these sentiments, saying: “We have doubled our headcount in the last 18 months in Asia, so it’s a very exciting time for us. We’re investing in people and in other businesses.”
He added that there is huge potential for growth in Asia because penetration rates are still very low by international standards.
“The challenge is, how do we get more general insurance purchase, and more specialty insurance purchase? How do we increase penetration levels? This is such a catastrophe-prone region of the world—we need the social safety nets, these mechanisms, to protect society,” Egerton said.
“That’s the big challenge we’re all facing in a period of inflation, economic hardship and political tensions around the world—all in all, it’s not an easy time, but the big issue for us as an industry is, how do we do a better job at selling insurance?”
He added that as an MGA, Nexus has a clear focus on distribution, getting out and covering the ground in a diverse patchwork of different economies, societies, and cultures with different approaches to risk and insurance.
Growth ahead
The Spectrum acquisition will support this aim. It will be Nexus’ 16th MGA acquisition since formation in 2008—and the 25th for Kentro Capital Group.
Spectrum is led by Michael Darby who has more than 40 years of experience in the re/insurance industry and oversees the marine proposition. Andrew Crampton leads the property portfolio with over 25 years of underwriting experience in the class, including previous senior positions with Swiss Re and Lloyd’s syndicates.
The Spectrum management team will continue to run the business as normal post-transaction while maintaining an ongoing minority stake in the business. Post-acquisition, Spectrum plans to transition to the Nexus brand.
Meanwhile Nexus is building its accident and health treaty business in Asia via its team led by Peter Slot (pictured right), managing director of Nexus Accident and Health.
“We’ve employed local people, and that’s the way to do it.” Peter Slot, Nexus
“We’re building that book of business and it’s grown very well,” Slot said. “We have a very strong carrier, US Fire, who are with me at SIRC to meet our clients. Our role is to add value: to underwrite to be innovative, to be flexible, and not to be mainstream—for me it’s all about underwriting and taking advantage of opportunities, and that’s exactly what we’re doing here.”
Nexus wants to launch a number of different products in Asia working with local insurers, because it tends to write on a reinsurance basis, and Slot places real value on working with local partners.
“They understand the market better, they have local knowledge,” he said. “If you’re working with the local market, that makes you stronger. Generally, they will retain a portion of the risk, maybe 20 percent, and we then provide reinsurance partnership. We bring them the product, we bring them the underwriting, and they help us penetrate the markets.
“One of the good things about Nexus is the way we work with local people here. We’ve employed local people, and that’s the way to do it.”
Slot’s team continues to innovate, for example by developing a product that will pay for stem cell treatment—a response to the fact that while storing stem cells is relatively affordable, paying for the procedures that use them can be prohibitively expensive.
