Motion Specialty lines up extra capacity as it eyes high-value homes and flood ops

By Chris Munro

June 26 - (The Insurer) - Motion Specialty already has additional capacity partners lined up that will come online in the coming months as it looks to extend its reach in the high-value homes and standalone flood insurance markets.

The London-based MGA was formally launched in May by Dan Alpay and Alex Kickham, and is backed by investors including Charleston, South Carolina-headquartered independent U.S. wholesaler broker Johnson & Johnson, and (re)insurer Inigo.

As this publication reported in May when Motion Specialty was unveiled, the MGA has secured Lloyd's coverholder status and is writing business on behalf of a panel of capacity providers led by Inigo's Lloyd's Syndicate 1301.

To begin with, Motion Specialty is writing a portfolio of high-value home and standalone flood business on a surplus lines basis across the U.S., classes that are well known to founders Alpay and Kickham from their time at their previous company Hiscox.

Prior to co-founding the business last year, Alpay spent 14 years in underwriting roles at Hiscox after an earlier stint with Canopius.

Kickham was with Hiscox for 12 years having joined as a graduate trainee underwriter in 2011, according to his LinkedIn profile.

Even though Motion Specialty opened in May, Kickham told Program Manager that the company is already “growing the business quite a lot”.

“While we formally launched as an entity (in May), we’ve been incubated to a certain extent over the past 12 months.

“So we have an initial capacity panel that we’re looking to grow at present. We have more committed capacity all ready to incept in the next couple of months to broaden out our existing (panel) and probably more throughout the rest of the year.”

Kickham said most of the capacity currently supporting Motion Specialty is from Lloyd’s, with London company market carriers and domestic U.S. players also backing the MGA’s underwriting.

Inigo’s head of partnerships George Stratts said his company has partnered with Motion Specialty because the opportunity is “a winning proposition”, with Kickham and Alpay “real experts” in the MGA’s chosen lines of business.

The distribution capabilities presented by Johnson & Johnson along with an opportunity to make inroads into the underserved high value homes market where admitted carriers have retrenched were also attractive, explained Stratts.

“All those were relevant, and that's why we are the lead capacity behind it. Also being an investor/shareholder of the entity, we thought that it was a winning opportunity overall,” Stratts added.

Kickham said Motion Specialty has launched with the high-value homes and flood offerings because he and Alpay felt they “would sit well within an MGA setup”.

As he explained, the ability to syndicate risk across several carriers on its high-value homes product means it can offer a high level of coverage without its underwriting partners being significantly exposed to a risk.

And on the flood side, the capacity partners can tap into a market that has a high barrier of entry given the IT platform needed to model and underwrite the business.

While Motion Specialty has launched with support from Johnson & Johnson, Alpay said the MGA is working with select other wholesalers to distribute its high value homes and standalone flood products.

“We want to stay semi-exclusive to an extent and not deal with everybody in the world,” he said.

“We’ve made pretty clear from the start that with all the wholesale distribution partners we have that Johnson & Johnson are also an investor in the business, but it is completely separate,” said Alpay.

“We see some positive from having what we see as a semi-exclusive product that can only be bought and purchased through certain people. And we want to have big partnerships and relationships with few people,” Alpay explained.

“Essentially, we're a very small startup that can punch above our weight, because we have two very big, sophisticated partners who support us,” he said.

“We want deep but varied relationships, both geographically and in the type of business that people can give us,” added Kickham.

There is interest in potentially broadening Motion Specialty’s product suite into other areas in the future, but Kickham said the MGA’s focus currently is on building out its current offerings.

“We’re very much in the early stages of our business and really want to drive home the success of both the high value product and the flood product,” he said.

“But in the fullness of time, we will look to do other things that are complementary to both of those, in terms of both product and also to the capacity providers that support us.”