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Technology key to Spinnaker’s role as conduit for risk and capital

29th March 2019 - Author: Luke Gallin

Spinnaker Insurance Company, a program and fronting start-up, sees the adoption and use of technology throughout the value chain as critical to its business model as it looks for increased scale.

spinnaker-insurance-company-logoSpinnaker was launched in 2015, and focuses on writing property and casualty exposed programs from U.S. homeowners and specialty business lines.

In a recent interview with Reinsurance News, Spinnaker executives explained that its strategy is to be a conduit between primary policyholders, program administrators, and the reinsurance and capital markets.

“Reinsurance capital is essential to our business model as it increases our capacity to serve primary markets. Our trading partners appreciate our ‘value-added’ underwriting-driven focus regardless of whether we take underwriting risk,” said Senior Vice President (SVP) Adam Tyburski.

“Historically,” added General Counsel Nicholas Scott, “Spinnaker’s reinsurance purchasing has been weighted towards traditional, highly-rated global reinsurers. As we seek to align interests across all constituents, we consider various structures, including ceding to risk-bearing affiliates of our program administrators.”

Spinnaker adopts a similar model to the well-known program service and fronting provider State National. The firm looks to leverage managing general agent (MGA) networks to access risk, ultimately enabling insurance and reinsurance capacity to get closer to primary risks via its admitted state licenses.

Over the last three to four years, Spinnaker has experienced robust growth, but like any start-up, there have been challenges throughout the journey.

“Our greatest challenge, like any start-up, is scaling our business while maintaining the high level of service that our partners are accustomed to. It’s vital that we maintain the same culture, values, and corporate reputation that we have developed as we will build our operation in 2019 and beyond,” explained Chief Financial Officer (CFO), Jesse Willmott.

Start-ups like Spinnaker support the efficient transfer of risk and capital by effectively jumping the risk value chain. By providing efficient access to capital and risk, Spinnaker can earn fees by assisting both parties, matching the right risk with the right capital as a conduit between capital providers and the originators of risk.

To achieve this, Willmott explained that technology plays a very important role for Spinnaker.

“Adopting and using technology throughout the value chain is absolutely critical to Spinnaker’s success. Thus, we partner with organizations that have the capability to adapt to changes by deploying best-in-class technology that ultimately improves the experience of all stakeholders: consumers, distributors, intermediaries, and capital providers.

“For example, as successful program business requires timely receipt of data to allow real-time actions around managing profitability and reporting requirements, Spinnaker has prioritised investing in superior data intake and reporting resources,” said Willmott.

Looking forward, Spinnaker is expecting to grow organically, anticipating to more than double its top-line writings, while at the same time further expanding its geographic and product footprints.

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