Transcript Document

SPARTA Overview
Specialty Program and Risk Transfer Alternatives
SPARTA Overview
SPARTA
Specialty Program and Risk Transfer Alternatives
Vision:
• Premier provider of customized unbundled
program solutions
• Single source solution for program structures
delivered by experts whose objective is
sustained customer success
• “Exclusive Practice. Collective Purpose.”
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SPARTA Overview:
Vision, Mission, Values, Strategic Objectives
Vision: To be the premier provider of customized unbundled program solutions in the property and
casualty market place. “Exclusive Practice. Collective Purpose.”
MISSION: To provide the unbundled program marketplace a long term solution for the placement of ART and
Specialty programs characterized by expertise, focused service and a controls orientation that adds value to our
customers’ business.
Core Values
Strategic Objectives
Service: We are a customer-centric organization designed to
deliver and maintain a customized product timely, smoothly, and
with value added. We believe that to lead is to serve.
Pluralism: We believe the best outcomes are the product of
communication, transparency and input from a variety of unique
perspectives.
Accountability: We conduct business in a manner that evinces
the highest ethical standards, unqualified respect for our
business partners and accountability for our results.
Rigor: We pursue excellence in all aspects of our enterprise
and strive for continuous improvement and innovation in pursuit
of our goals.
Teamwork: We recognize our collective purpose is furthered by
teamwork and that each individual makes an indispensable
contribution to the success of the company.
Action: We have a bias for action and initiative.
Financial: Create Shareholder value by delivering on the
Plan.
Customer Value: Develop reputation and branding based
upon focus, commitment, breadth of product offering and
expertise. Be recognized as long term partners for best in
class producers and providers whose interests are aligned
for the ultimate goal of sustained customer success.
Operational Excellence: Leverage experience to create
leading edge, technology-based infrastructure that
promotes ease of doing business, speed to market and
value added support characterized by due diligence,
information-based decision making and a controls and
execution orientation.
People: Attract, develop and retain top tier intellectual
capital regarded as industry leaders.
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SPARTA Overview
SPARTA operates in two niche P&C segments
Specialty Insurance Programs
• Risk fully retained by SPARTA with sliding scale
commission
Alternative Risk Programs
• Program-level risk sharing with captives
• Groups, Franchise/Association, Sponsored
Unbundled program services
• Policy underwriting and administration, Claims handling,
Risk control,
• Subject to SPARTA approval
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SPARTA Company Background
SPARTA Insurance Holdings
• Formed in March 2007
• Founders: George Estes III – Chairman & CEO,
Kevin Costello – President & COO, Dawne Ware – EVP & CFO
• Private Equity Investment of $279.1 million
– Corsair Capital, York Capital Management, Goldman Sachs,
Primus Capital, Keefe Bruyette & Woods, SPARTA Execs
• Diverse group of investors with previous experience investing in
successful insurance entities and an understanding of the
insurance industry’s long-term, stringent capital requirements.
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SPARTA Financial Highlights
SPARTA Insurance Company
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Rated A - (Excellent), financial size category IX, by A.M. Best with a
clean balance sheet and surplus of $257 Million. This rating was just
re-affirmed in Sept. 2008.
The $257 Million of capital resides at the insurance company level, not
the holding company, and is subject to regulatory oversight as an
admitted insurance company.
SPARTA’s capital is all equity. There is no debt to service, no interest
to be paid, no loans to be called or variable interest rates.
Investment portfolio consists of a high quality, well diversified, fixed
income (only bonds), and cash portfolio with an average rating of AA+
and avoids concentration by issuers or types (treasuries, municipalities,
corporates).
Investment portfolio is professionally managed by General Re-New
England Asset Management, a Berkshire Hathaway company
specializing in insurance company management for 24 years.
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SPARTA Timeline
April – May 2007:
• Hiring of Senior Mgt Team
– 18 of 18 offers accepted. All senior management positions filled. Average
industry experience of 19 years specializing in Program and ART segments
August 2007:
• Purchased American Employers Insurance Co - 52 jurisdiction, admitted carrier
• Received A – (Excellent) rating from A.M. Best
• Changed company name to SPARTA Insurance Company and updating filings
• State-of-the-art infrastructure exclusively and comprehensively built to service and
support unbundled program business
• Targeted marketing rollout and began accepting submissions
December 2007 - November 2008:
• Strong market reception - SPARTA has received over 200 program submissions
representing over $2 Billion in premium since August 2007
• 14 new programs under implementation or actively producing business;
Representing over $100 million annualized GWP.
• Over 3,000 policies issued and counting
• Now at 37 employees with staff additions timed to coincide with program growth
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SPARTA Advantages & Competitive Strengths
SPARTA is uniquely qualified to meet the challenging needs of today’s
Specialty & ART Program Market
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Experienced management – the expertise to execute
Breadth of product offering along the entire continuum of risk sharing
Customized product capability, structure flexibility, unbundled services
Countrywide, admitted company rated A – (Excellent) by A.M. Best
Selective and disciplined underwriting
Integrated technology platform designed for Specialty & ART Programs
Expense conscious business model – focus on efficiency and value
Unencumbered balance sheet with no legacy issues and distractions
Exclusive focus and long-term commitment to the unbundled program
market – no inherent channel conflicts
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SPARTA Program Appetite & Product Offerings
SPARTA Targeted Lines of Business
• Commercial Auto, General Liability, Workers Compensation,
Property (mono-line or multi-line basis, but prefer balance)
• Ability to offer typical limits profiles for program business
• Available on state-specific, regional, countrywide basis
subject to approved filings and overall exposure
management
• Admitted coverages only at this time
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SPARTA Program Appetite & Product Offerings
SPARTA Targeted Classes of Business
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Retail / Wholesale
Service
Light Manufacturing
Hospitality – hotel/motel, restaurants
Habitation – apartment managers, condos
Light-Medium Trade Contractors – electrical, mechanical, comm’l.
Transportation / Distribution – small/medium fleets,
short/intermediate radius, general commodity hauling
Non-targeted Classes
PEO’s, General Contractors, Homebuilders, Roofers,
Professional Liability, Inherently High Hazard Classes
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SPARTA Program Eligibility & Review
SPARTA Program Eligibility
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Targeting an average program GWP of $10-15 million
Minimum first program year GWP potential of $5 million
Prefer homogeneous, targeted classes - avoid cat risk
Structured with either sliding scale or captive risk-sharing
– Structure can be re-visited at each program renewal
• Established track record (5 years of data), proven service
providers, and viable business plan
• Subject to due diligence and review by SPARTA’s team:
Underwriting & Compliance, Marketing, Actuarial, Business &
Customer Operations, Claims, Finance & Credit, Systems
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SPARTA Review Process
Pre-Binding Process
Log & Clear
PRE-SCREENING
Pre-Qualify
Assign Disposition
Underwriting & Pricing
Credit
Customer Operations
FULL EVALUATION
Regulatory & Financial
Compliance
Exposure Evaluation
Structure Evaluation
Rate Compliance
Loss Rated Pricing
Actuarial
Financial Review of pertinent parties
Set collateral level based on
financial review
Secure initial collateral
Evaluation and Due
Diligence of Program
Administrator
Agency Appointment
Product Evaluation
Program Financial Terms
Finance
Payment Terms
Claims
Systems
CONSOLIDATED MANAGEMENT
COLLABORATIVE REVIEW BY
REVIEW
UNDERWRITING COMMITTEE
TPA Selection, Approval,
Oversight & Management
Assess requirements to support
operational platform
ISSUE PROPOSAL
NEGOTIATIONS
BINDING OF COVERAGE
POST BINDING ROUTINES
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SPARTA Success Stories
Specialty Programs:
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$7.5 million Workers Compensation Specialty Program in Northeast states managed by a Program Administrator
with an affiliated TPA. Targeted classes are auto services, hotel/motel, restaurants, and grocery stores. Plan to offer
Property/GL coverages within 1 year.
– Needs addressed: Solved channel conflicts, expanded territory and eligible coverages
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$7.5 million Multi-line (Workers Comp, GL, AL, APD) Specialty Program for Mergers & Acquisitions customers
countrywide and a $10 million Multi-line (Workers Comp, GL, AL, APD) Specialty Program for Trade Contractors in
Northeast. Both programs are managed by an experienced Program Administrator with dedicated expertise in these
classes. Gallagher Bassett is the TPA.
– Needs addressed: Solved channel conflicts, overage and territory expansion, improved technology platform,
stabilized programs with a long-term commitment
Captive Programs:
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$20 million Multi-line (Workers Comp, GL, AL) Agency Captive Program for Service Contractors in Mid-Atlantic
and Southeast states. Program Administrator has dedicated underwriting, loss control, and claims oversight staff.
Gallagher Bassett is the TPA.
– Needs addressed: Agency participation in results via a quota share captive arrangement
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$5mm Workers Compensation Agency Captive Program concentrated in California and managed by a Program
Administrator. GAB is the TPA. Targeted classes are retail, light manufacturing, habitation, restaurant.
– Needs addressed: Dedicated agency captive market, ability to offer coverages in addition to workers
compensation
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SPARTA Submission Process
SPARTA Program Submission Contacts
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For initial screening and structure discussion contact either:
Brian First
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Phil Cameron
Chief Marketing Officer
Ph) 860.275.6520
[email protected]
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VP of Marketing
Ph) 860.760.4010
[email protected]
Complete Program Evaluation Forms
– Prospective Program Summary (minimum info required to log in)
– Program Submission Questionnaire w/ attachments
– Program Administrator Due Diligence Questionnaire
– Expect on-site due diligence if we proceed
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