Notes from November Monthly Meeting with the Founder
Provide underwriting services on behalf of large insurers
- Cashflow positive
- High margin Low risk
- Strong partnership with broker networks
- Established position in the growth market
Waht is Managing General Agent(MGA)
They provide insurers with access to new geo's for products that are emerging or too small
- Underwrite products on behalf of the large insurer
- Paid commission by insurer for management of portfolio
- No payment liabilities in case of claims
- UK business established in 2017
- AU business established in 2021
- Shares held by management and board - 30.72%
- Shares held by top 20 shareholders - 69.85%
- Shares on the issue - 89Mil
- UK - Looking for 20% YoY growth
- Building for scale
- Loylds major partner
September 2021 Qtr Results:
- Cashflow positive
- Revenue up 131.9% PCP
- The insurance premium under management up by 43.6% PCP
- Gross underwritten Premium (GWP): 12.8 mil
- TAM/Market Size: 6.8b AUD
- Three types are MGA's"
- Independent MGA's
- Own by Insurer
- Within Insurer
In Australia 50+ MGA's such as ENA, Steadfast
- The lifespan of 7-14 years, there is a need for an exit strategy
- Brooklyn was acquired by Axa when they were 30 million in GWP
- Aim is to have a number of BU's to complement each other - multiple revenue streams
- insurance is cyclical in nature
Global partnerships with Axa, Lloyds, MGAM, CFC, Beazley, Axa XL, British Engg services
- Attracting talent is critical for the business
- Key hire did from Axa in Australia
- Looking for skin in-game from management hires
- Relationships with brokers are key for the business
- New trading partners were identified to manage more portfolios
- partner needs to be the right fit for them to work with them
- Diversity in partnership to manage risks
Q: what's the long term exit strategy?
- File for APRA regulation - carry risk ourselves - need 20 mill in the bank - 110k fees
- The distribution model will be through brokers
- Can look at Hybrid structure - work with Axa to partner
- Can move to be an Insurance company - similar to TWR- TOWER Limited
Q: Product lines or industries next target
- environment
- terrorism
- intellectual-property
- Services Economy
Q: Capital Raising:
- Recently did 2 mill raise - 50% subscribed from existing investors
- May do another raise for an acquisition
- Will make an acquisition 40x EBITDA? - No looking at 6-8 times for smaller companies
- PSC insurance - a good example of how to grow with M&A