ALIRT Research - Fronting Insurers At A Crossroads: Collateral Scandals and Restricted Reinsurance Capacity Remain Headwinds

In a recent client release, ALIRT provides an update of its 46-company Fronting Company Composite as of Year End 2022 and 6M2023 Financial Filings

HARTFORD, Conn., Oct. 10, 2023 /PRNewswire/ -- ALIRT Research recently released an update on the U.S. Fronting Insurance sector, based on its composite of 46 U.S. fronting insurer specialists. 

As ALIRT shows, this market has expanded rapidly over the last decade, both in terms of market entrants and premium written, with especially strong growth in 2020 and 2021 as new and existing insurance groups took advantage of hardening property & casualty insurance rates and heightened private-equity interest.  That said, ALIRT points out that with 2022 direct written premium of just $15.6 billion, this corner of the U.S. property & casualty market remains a relatively small contributor to overall U.S. P&C premium.

The report also includes a section on the Vesttoo collateral scandal that unfolded this past summer and left the fronting sector winded as it sought to tease out companies impacted and any financial and reputational fall-out going forward.

Lastly, the report provides an overview of the financial standing of these fronting insurer specialists, based on ALIRT's proprietary two-page ALIRT Analyses.  The report concludes that while ALIRT Scores for the composite insurers remain largely within normal ranges, the dispersion of performance across the composite can be substantial.  This is due in part to the start-up nature of many of these carriers as well as the fact that most cede most if not all of the premium they write.  Also, the impact of the Vesttoo fake LOCs on impacted insurers' balance sheets is still playing out.

For an abbreviated version of the report, please contact ALIRT at [email protected]

About ALIRT Insurance Research

ALIRT Insurance Research models the financial performance trends of life, health, and property & casualty insurers versus their peers and respective insurance industry sectors.  This work is used by ALIRT's clients to meet due diligence, competitive intelligence, and sales/marketing needs.   With over 20 years of experience, long-time insurance market relationships, and an emphasis on service, ALIRT helps its customers go beyond ratings and financial data to enhance and strengthen their insurance carrier oversight efforts.

Media Contact:
David Paul
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SOURCE ALIRT Insurance Research