CrossCover Insurance Services Market Research Report

Background

Overview

CrossCover Insurance Services is a Managing General Underwriter (MGU) specializing in non-admitted property coverage for commercial properties across the United States. Established in 2020, the company aims to provide innovative insurance solutions that mitigate carrier volatility and reduce reinsurance costs. By leveraging catastrophe (CAT) capacity, CrossCover writes Excess & Surplus (E&S) risks nationwide, offering broad coverage from highly rated insurance and reinsurance companies.

Mission and Vision

The company's mission is to leverage CAT capacity to write E&S risks across the country, thereby reducing carriers' volatility associated with catastrophe perils and reinsurance costs, while achieving top-tier returns. This approach aligns the interests of all participants by offering equity to underwriters and tying CrossCover's performance to the results delivered to insurers and reinsurers.

Industry Significance

CrossCover operates within the E&S insurance market, focusing on middle-market commercial properties. By diversifying risk and offering tailored coverage solutions, the company plays a crucial role in stabilizing the insurance landscape and providing essential coverage options for businesses in various sectors.

Key Strategic Focus

Core Objectives

Risk Diversification: By writing diverse occupancies and leveraging CAT capacity, CrossCover aims to reduce carrier reinsurance costs and volatility.

Alignment of Interests: The company offers equity to underwriters, aligning their compensation with the underwriting profit of its carrier partners.

Areas of Specialization

Middle-Market Commercial Properties: Focusing on E&S risks, CrossCover provides coverage for a wide range of commercial properties, including those exposed to catastrophic events.

Key Technologies Utilized

Proprietary Tools: CrossCover employs proprietary tools to monitor its portfolio in real-time, ensuring effective risk management and underwriting decisions.

Primary Markets Targeted

United States: The company writes E&S risks nationwide, targeting middle-market commercial properties across various industries.

Financials and Funding

Funding History

Initial Funding: CrossCover was established in 2020 in partnership with Orchid Underwriters Agency, LLC.

Acquisition by Brown & Brown, Inc.: In February 2022, Brown & Brown, Inc. entered into an agreement to acquire Orchid and CrossCover, with the transaction expected to close before April 2022.

Management Buy-Out with Gallatin Point Capital: In April 2023, CrossCover completed a management buy-out, with support from private equity firm Gallatin Point Capital, making the company majority-owned by management and Gallatin Point.

Total Funds Raised

Specific details regarding the total funds raised by CrossCover are not publicly disclosed.

Notable Investors

Gallatin Point Capital: A private equity firm that partnered with CrossCover in April 2023.

Brown & Brown, Inc.: Acquired Orchid and CrossCover in February 2022.

Utilization of Capital

The capital raised has been utilized to support CrossCover's growth initiatives, including expanding its product offerings, establishing new offices, and enhancing its underwriting capabilities.

Pipeline Development

Key Pipeline Candidates

As a Managing General Underwriter, CrossCover's pipeline consists of various commercial property insurance policies, including those exposed to catastrophic events. Specific details about individual pipeline candidates are not publicly disclosed.

Stages of Development

Policy Writing: CrossCover began writing policies in August 2021, focusing on middle-market E&S property solutions.

Product Expansion: The company has expanded its product offerings to include Equipment Breakdown and Builder's Risk coverage, with plans to introduce additional products in the near future.

Target Conditions

CrossCover targets a wide range of commercial properties, including those exposed to catastrophic events, aiming to provide comprehensive coverage solutions.

Anticipated Milestones

Specific timelines for anticipated milestones are not publicly disclosed.

Technological Platform and Innovation

Proprietary Technologies

Real-Time Portfolio Monitoring: CrossCover utilizes proprietary tools to monitor its portfolio in real-time, ensuring effective risk management and underwriting decisions.

Significant Scientific Methods

Peril-Specific Pricing: The company uniquely prices twelve perils for each location, factoring in loss history, COPE specifics, onsite inspections, and the underwriter’s experience.

Leadership Team

Executive Profiles

Scott Hanson: Co-Founder, Chief Executive Officer & President. Prior to CrossCover, Scott was the Chief Underwriting Officer and Chief Capacity Officer at AmRisc. He has extensive experience in the property insurance industry.

Paul Kopecky: Chief Operating Officer. Specific details about Paul's professional background are not publicly disclosed.

Kristin Olansen: Director, Finance. Specific details about Kristin's professional background are not publicly disclosed.

Dean LaPierre: Chief Underwriting Officer. Specific details about Dean's professional background are not publicly disclosed.

Key Contributions

The leadership team has been instrumental in establishing CrossCover's market presence, expanding its product offerings, and aligning the company's interests with those of its carrier partners.

Leadership Changes

Recent Appointments

Chicago Office Opening: In April 2024, CrossCover opened its Chicago office to complement its Houston office, strengthening its presence and market penetration.

Boston Office Expansion: The company plans to open a third office in Boston in the third quarter of 2024.

Competitor Profile

Market Insights and Dynamics

The E&S insurance market is characterized by its ability to provide coverage for risks that standard insurers may not accept, including those exposed to catastrophic events. This market is essential for businesses requiring specialized insurance solutions.

Competitor Analysis

Hallmark Financial Services: A Dallas-based company offering a range of insurance products, including E&S lines.

AmRisc: A Houston-based company specializing in property insurance, particularly in catastrophe-exposed areas.

General Star Management: A corporation providing E&S insurance solutions.

Starr Technology Solutions: A Hubbard, OH-based company offering various insurance products.

Lexington: A London-based corporation providing E&S insurance services.

Strategic Collaborations and Partnerships

CrossCover has established partnerships with A.M. Best-rated carriers and reinsurers, focusing on underwriting skills and results rather than distribution.

Operational Insights

CrossCover differentiates itself through its unique pricing model, peril-specific underwriting, and real-time portfolio monitoring, setting it apart from competitors in the E&S insurance market.

Strategic Opportunities and Future Directions

Strategic Roadmap

CrossCover plans to continue expanding its product offerings, including the introduction of general liability and umbrella coverage to its "RealTime" property product for small commercial businesses.

Future Business Directions

The company aims to strengthen its market position by opening new offices in strategic locations and attracting skilled underwriters to enhance its underwriting capabilities.

Opportunities for Expansion

CrossCover has opportunities to expand its market reach by leveraging its partnerships and proprietary technologies to offer comprehensive insurance solutions across the United States.