CORRECTED-Sidecars a permanent play and not a fad in the DUAE market

By Chris Munro

June 4 - (The Insurer) - Interest from both delegated underwriting authority enterprises (DUAEs) and investors to support sidecars in the MGA/MGU and programs space is not a fad and will instead play a more prominent role in the market going forward, according to MS Transverse president John Fitzgerald.

Fitzgerald, speaking during a fireside chat at the Program Manager Conference 2025 in New York, said interest from DUAEs in sidecars is partly so they can also participate alongside their capacity providers in any underwriting profit from “the quality risk” they are taking on.

From investors’ perspective, one motivation for supporting a sidecar is the opportunity to access uncorrelated risks and returns.

Fitzgerald said he expects such interest is not short-lived, with sidecars an increasingly prominent part of the DUAE market.

“We’ve talked about (whether it’s a) trend versus fad. I think it's at minimum a trend and probably a way of life for the future,” said Fitzgerald.

MS Transverse has recent experience in supporting a sidecar.

The MSIG-owned hybrid fronting carrier last year provided capacity for a sidecar supporting AmRisc's coastal commercial E&S property portfolio.

Called Trouvaille Re, the sidecar launched in 2024 with $325 million and renewed for this year with $580 million.

AmRisc chief risk officer John Horton was also participating in the fireside chat, and said the MGA had “hit a home run” forming the sidecar in 2024.

While the sidecar’s launch has been viewed as a strong success by AmRisc, Horton said the catastrophe-focused MGA is conscious of not allowing the vehicle to become too large a player in its capacity panel.

“We’ve got to dance with who (brought) us here, and that’s the balance sheet carriers who have stuck with us (and been) very instrumental to our success,” said Horton.

“I'm employee number seven. I started in 2002, and I love the company, and we're in our 25th year this year.

“But we think we have to have a balance of balance sheet carriers, program manager approach, and risk vehicles such as (the sidecar). We think there’s a balance aspect of it.”

Horton said AmRisc has been very transparent to capacity providers about where it believes pricing is headed and how it sees the market developing over the next couple of years.

“For that reason, we'll stick to that balance of balance sheet carriers, and fronted, and risk vehicles,” Horton said.

“We hit a home run last year, and we hit another one this year with renewing (the sidecar). So, I think that's good, but we need some singles and doubles, and you've got to do some other things besides being just a one trick pony,” he added.