Nexus strikes first of three M&A deals planned for 2018
Nexus Group has acquired Lloyd's coverholder and a specialist directors & officers and financial institutions (DOFI) MGA Apsley Specialty.
"As a group, we are targeting three acquisitions per annum, and this is just the sort of niche business with an auditable profitable underwriting track record that we can seamlessly bring into the business alongside some larger transformational deals," Nexus founder and executive chairman Colin Thompson said in a Feb. 13 press release.
"This is a strategic acquisition that will augment our business model in an important year where we are preparing for a shareholder liquidity event in Q3 / Q4," he added.
Thompson had told Intelligent Insurer in October 2017 that the group is eyeing future M&A deals to diversify and strengthen its managing general agency portfolio. More recently, it also announced a “ potential shareholder liquidity event” in 2018.
The Apsley acquisition brings together two DOFI MGAs. Apsley Specialty focuses on the asset management sector, with a particular specialism in alternative asset managers. It has established itself as a prominent DOFI MGA and received US capacity from its underwriting partners in 2016, which now sits alongside its core UK and international offering. DOFI was the first class of business the Nexus group underwrote at Nexus’ genesis in 2008.
“Apsley Specialty is a fast-growing high quality MGA that will complement our existing DOFI capabilities, especially in terms of geography with Apsley’s US capacity," said Thompson. "In a competitive market, Apsley grew its gross written premium (GWP) 64 percent from 2016 to 2017, whilst still maintaining excellent underwriting discipline and strong loss ratio performance. This is testament to the high calibre individuals within the business.
"This acquisition will allow us to build on our established position in a historically highly profitable class of business. As we continue to provide innovative DOFI underwriting solutions to both clients and underwriting partners, we will look to grow the combined DOFI offering to GWP of £35 million by 2020."
Apsley Specialty is headed up by James Lawrie, who will join the board of Nexus Underwriting as part of the acquisition. Prior to founding Apsley, Lawrie spent several years specialising in alternative investments at Towers Watson and Caliburn Capital.
The company said that following the transaction and expansion of Nexus Financial Lines, Lawrie will become managing director and lead the combined DOFI business, Jamie Ricketts will become chief underwriting officer, DOFI, and both will join the board of Nexus Underwriting. Joanne Edgley, already a director of Nexus Underwriting, will lead Nexus’ commercial PI division as managing director of PI. The strength and breadth of this combined management team for Nexus Financial Lines will enable Nexus to significantly develop this core capability.
James Lawrie, CEO of Apsley Specialty, commented: “The combined business will continue to focus on our core expertise and both sides will bring their complementary strengths. I look forward to leading the combined business through this exciting period.”
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