Ategrity files for IPO as it highlights 28% GWP growth and improved underwriting

By David Bull

March 25 - (The Insurer) - Ategrity Specialty Insurance Company (ASIC) has filed for a New York IPO as the E&S carrier cited top and bottom-line growth and said its “productionized underwriting” capabilities in the small to medium-sized business segment will allow it to drive enhanced profitability as it scales.

The S-1 registration statement disclosed that current backer Zimmer Financial Services Group will continue to hold a majority of the voting power of common stock in the insurer following the planned offering to go public and list on the New York Stock Exchange under the ASIC symbol.

JP Morgan and Barclays have been named joint book-running managers on the IPO.

ASIC and its affiliate Ategrity Specialty Insurance Limited both hold financial strength ratings of A-minus and long-term issuer credit ratings of a-minus from AM Best.

The company, led by Justin Cohen, had its ratings affirmed by AM Best last November. It began underwriting E&S business in late 2018 after initially being launched with former Scottsdale Insurance CEO Mike Miller at the helm.

In the S-1, ASIC disclosed that it has since grown its business “substantially while generating attractive underwriting results”.

Last year, the insurer write $437.0 million in gross written premiums, which it said represented a compound annual growth rate of 28.4% over the last two years.

Its combined ratio for the year ended December 31, 2024, was 93.9%, a decrease of 3.6 percentage points from the previous year.

Meanwhile its members’ equity increased 23.8% to $398.3 million in 2024.

The carrier said it has built a proprietary underwriting platform that combines sophisticated data analytics with an automated and streamlined process, which allows it to “efficiently serve our clients and deliver long-term value to our stockholders”.

It describes “productionized underwriting” as its technology-driven method of standardizing, simplifying and automating its transaction process.

ASIC says this gives it a competitive edge by allowing it to offer the “consistent, high-speed, and low-touch interactions” that its distribution partners value.

“When we entered the E&S industry, we found what we believe to be an under-served and inefficient marketplace that was hindered by inconsistent and antiquated processes of legacy insurance carriers.

“We also believe that many distribution partners and their end-clients were struggling with slow response times, unpredictable underwriting capacity, and subpar pricing, which we believe make the market ripe for technology and efficiency-driven disruption,” the S-1 said.

The company claimed that its technology-enabled underwriting process sets it apart in the E&S market.

It added that it “intensely” studies the industry and geographical microsegments its end-clients operate in using “sophisticated” data analytics, which it then leverages to build quantitative risk models that shape its risk appetite and client targeting.

The insurer said it has a growing network of 460 distribution partners, which provides it with increased transaction opportunities and diversified sources of business.

“Our fully integrated claims management function is designed to enable us to resolve claims efficiently and effectively. We take an active approach to risk management through real-time performance analytics, rigorous risk aggregation monitoring, and robust reinsurance protection aimed at minimizing volatility and generating consistent underwriting results,” it continued.

BUSINESS MIX AND PERFORMANCE

ASIC currently offers P&C solutions to SMBs in the real estate, hospitality, construction and retail industry verticals.

“By leveraging deep fundamental research and advanced data analytics, we meticulously analyze the universe of potential insureds, stratify their risk characteristics by micro-segments, and quantify the perils they face.

“Once we have acquired a deep understanding of a specific market, we define target business profiles that match our risk appetite and design products that meet our end-clients’ needs,” said the S-1 filing.

By business line, the carrier offers commercial property, low-limit general liability and management and professional liability products on both a primary and excess basis.

It focuses on shorter-tail underwriting risks and limited catastrophe risk in a bid to reduce the volatility of its results.

Its portfolio of E&S business as at December 31, 2024, has four states in which 5.0% or more of its gross written premiums were concentrated: California (21.0%), Florida (16.2%), Texas (12.8%) and New York (6.4%).

ASIC added that it has a “well-capitalized balance sheet” with “minimal” pre-2020 reserves as it has also been able to benefit from the current favorable pricing environment in the E&S market.

The carrier said it will target growth initiatives with product, industry and distribution expansion and will continue to invest in enhancing its technology to drive innovation and efficiency.

Its tech-driven offerings include Ategrity Select, which pre-underwrites specific classes of business to allow distribution partners to bind quotes in as little as a few minutes. The company said it will leverage the platform to grow into new verticals.

It also cited its administration system AtegrityOne, which aims to provide cost-effective support for new targeted classes “with agility and scalability”.

ASIC’s chairman is Stuart Zimmer, who is CEO of Zimmer Financial Services Group.

ASIC’s management team includes Cohen as CEO, Chris Schenk as president and chief underwriting officer and Neelam Patel as chief financial officer.