Exclusive: Harper and Cala-led Euclid Crisis Management launches with AmTrust paper

By David Bull

July 10 - (The Insurer) - Scott Harper and Joe Cala are set to begin underwriting at the helm of Euclid Crisis Management after launching the MGA with a trio of offerings covering product contamination, product recall and restaurant contamination on E&S paper from AmTrust.

The duo brings long underwriting track records to the startup with Harper previously at Tokio Marine HCC for more than 15 years with a focus on the segment including product contamination and Cala the former product recall practice leader at Chubb, where he spent 13 years.

The latest launch on the John Colis-led Euclid Program Managers platform sees the new MGA initially bring up to a $10 million of limit to risks underwritten on a primary or excess follow-form basis.

The startup has established offices in Illinois, New York and Connecticut ahead of launch, with Harper and Cala co-managing principals.

In a statement confirming the launch, ECM said it is “redefining the standard” for crisis management as a purpose-built platform designed to deliver clarity, forward-thinking solutions and “exceptional” service in a complex and fast-evolving marketplace.

In an interview with Program Manager, Harper, who started working with Euclid on the MGA nine months ago, highlighted the customizable nature of the product offerings ECM has launched and the versatility of its policy forms, that are designed to serve a broad spectrum of businesses.

“There has been a push in this market to commoditize this insurance so that one size fits all. We want to take the focus away from that to put expertise, customization and quality first.

“We may not be the cheapest, or offer the highest limit, but we will offer something different, with a policy wording you’re not going to find elsewhere,” he explained.

'NEW AND IMPROVED COVERAGES'

Harper said ECM’s “new and improved coverages” include combining food and non-food products into one form, in contrast with the separate forms offered by carriers in the space, as well as new coverage enhancements tailored to the current risk landscape.

The product contamination product is designed for food and beverage companies to address the fallout from a contamination incident, whether through a recall, or the need to destroy products, or resulting business interruption.

The product recall insurance offering is for non-food manufacturers such as component parts, auto and consumer products, and covers recalls and business interruption losses.

The restaurant contamination product is specifically designed for retail food establishments to provide coverage against foodborne illness outbreaks that may lead to a restaurant having to shut down, clean facilities and destroy products.

ECM has partnered with crisis management consultants in areas such as media relations to assist insureds with pre- and post-event as part of the insurance coverage provided to them.

Cala said the customizable nature of the offerings and the additional services being offered are aimed at the full spectrum of potential insureds, with an initial focus on U.S.-domiciled companies from small businesses right up to those with global operations.

“Regardless of what class you are, what industry, whether you’re small, a first-time buyer, medium-sized or a major account, we will have a solution for everyone,” he said.

The startup is tech-enabled, incorporating artificial intelligence into its processes, and aims to deliver quotes within 24 hours and provide those insureds that bind coverage with access to a wide panel of consultants.

“Most carriers have one consultant and they’re on a retainer, so when a client binds with them, they have to use that consultant and it’s not always the best fit. We’re going to have a solution for everybody and give the client the ability to pick,” said Cala.

He added that the business is well-suited to the MGA model, because of the niche nature of the risk and specialist expertise required to underwrite it.

UNDERSERVED MARKET

Harper described the crisis management segment of the market as “well underserved”.

“I think our biggest competitor is self-insurance. The majority of companies, food and beverage and manufacturers, don’t carry it. So there’s a lot of opportunity.

“Everybody’s been chasing the same accounts, but for us it’s about casting a wider net and building up more relationships with different brokers,” he said.

The program will be written on surplus lines paper and open to U.S. agents that carry E&S licenses.

In the statement, Euclid’s John Colis said: “We are proud to support ECM in bringing a fresh, expert-driven approach to the crisis management space. Their focus on innovation and client service aligns perfectly with Euclid’s values.”

THE EUCLID PARTNER MODEL

Parent Euclid Insurance Services has a strong track record in the MGA sector for luring top talent for the incubation of specialist MGAs where staff retain significant equity stakes.

Its Euclid Program Managers platform runs a partner model, with the company typically taking a 51% stake with investing managers in the individual program administrators or MGAs holding the rest.

The parent takes a long-term view on its ownership of the MGAs launched on its structure but also provides a platform for growth and potential liquidity events if the owner-managers are looking to sell.

Euclid provides significant support in taking the startups to market to secure capacity from an insurance carrier, as well as helping with the negotiation of the agreement that governs the relationship.

It also provides administrative services such as accounting, IT and HR, freeing the owner underwriting teams up to focus on running the individual MGAs.

The MGAs it forms are typically set up as separate corporations.

Among its launches to date include Euclid Transactional, Euclid Public Sector, Euclid Design Underwriters, Euclid Financial, Euclid Life Science Specialty, Euclid Mortgage, Euclid Surety, Euclid Security and Euclid Marine.