Montague plans to grow to $300m GWP business
Company is also in talks with several technology companies to develop products that integrate insurance into other services
As well as investing in niche specialty MGAs, founder Don Harrell plans to team up with technology companies to create insurtech products
Start-up insurance investment firm Montague Investment is aiming to grow into a $300m-plus gross written premium business, its founder has said.
Speaking to Insurance Day at the Rendez- Vous in Monte Carlo, Don Harrell, said the company is looking to invest in niche managing general agency (MGA) businesses with $25m or larger portfolios, and was planning to team up with technology risk companies to develop insurtech MGAs.
The group recently took a minority stake in the acquisition and merger of UK General Insurance (UKG) and Precision Partnership Limited (PPL) by Rcaptial Partners.
However, Harrell said Montague’s business model was not dependent on it entering any specific lines of business and that it would consider “anything within the specialty niche arena”, explaining that he planned to build a “hub-and-spoke model” around its owned wholly-owned MGA Montague Risk Partners.
“We're looking for the best teams with good track records, who might be disenfranchised at their current company, that really want to be an entrepreneur and own a part of their business,” he said.
Harrell said: “When we set up these MGAs, they will own a portion of it, and they will run their cell. Montague as the parent company will own the majority and we'll provide the infrastructure – the services, the compliance, the technology, the data, the analytics – for them to run their business.”
He continued: “That model should be more cost effective, more efficient and its scalable: you can do four, five, 10, 20 MGAs.”
Montague is also in talks with several technology companies to develop products that integrate insurance into other services. “The logistics space is where a lot of this is happening today,” he said. “You’ve got a lot of IoT [internet of things] technology monitoring temperature in cargo, engines, tyre pressure, driver behaviour, all of that.
“There's a lot of data out there and [the question is] how you actually use that data to monitor risk, select risk, price risk and ultimately prevent losses from occurring?”
Harrell added he eventually wants Montague to have its own risk capital. “I think it’s really important to be able to take a percentage of our own risks that we write, whether it's a [Lloyd's] syndicate in a box, an insurance entity or a reinsurance vehicle. It also sends the right message to your capacity providers if you're also taking the risk yourselves,” he said.
