What’s on the agenda for Monarch in 2023

As Monarch manoeuvres through a particularly patchy insurance market in 2023, one business plan is top of mind – mergers and acquisitions.

“We want to continue with geographic expansion,” said Yiana Stavrakis (pictured), president of the company. “We’re partnering with businesses and expanding to geographies where we don’t have a presence, filling in the gaps to create a national platform.”

During a conversation with Insurance Business, Stavrakis expanded on the strategic impetus for this period of growth, how Monarch is reacting to personal lines disruption and how mentoring a team is more important than ever in the face of a hard market and a retiring workforce.

Focusing on benefiting retail broker customers and carrier partners

Monarch recently revealed an asset acquisition of Commonwealth Underwriters, Ltd., a specialty lines managing general agent (MGA) and wholesale broker with a strong foundation in key markets throughout the United States.

Based in Richmond, Virginia, the company is a natural fit for Monarch’s geographical expansion efforts while also offering a greater presence in the excess and surplus lines space.

In a statement addressing the acquisition, Derek Borisoff, CEO of Monarch E&S, said how Commonwealth’s reputation with retail broker customers and its binding markets is a perfect match for the company’s business philosophy.

However, there is also another strategic element to Monarch’s augmentation, which is focusing on “how we can benefit and help our strategic retail broker customers and carrier partners,” Stavrakis said.

To aid in these efforts, the company has been focusing on developing more robust technological capabilities. “We want to be able to provide our customers with different avenues to access us and our products,” Stavrakis said.

“We are creating ways to transfer data between ourselves and our carriers to augment more profitable books guided by thoughtful leadership. Enhancing our relationship with our carrier partners has enabled us to expand distribution and really build out a sophisticated presence.”

An additional element of the acquisition process is establishing a natural presence in these new business regions. “We are open to hiring teams and building out organically in those states, which we have previously done in Colorado,” Stavrakis said.

“The catastrophe exposed homeowners’ market is in complete disruption”

The increasing frequency and severity of environmental disasters due to climate change has had a seismic effect on the insurance industry.

“The catastrophe exposed homeowners’ market is in complete disruption,” Stavrakis said.

Homeowners in these areas are struggling to find coverage without a significant rate increase and a restriction of terms that includes higher deductibles and reduced coverage.

In order to respond to a more challenging marketplace, Monarch has therefore had to become more deliberate about how to continue to offer products to its customer base.

“We’re in the process right now of building our own umbrella product, as well as a homeowners’ product,” Stavrakis said.

“In order to do so, we are using data and technology to analyze these markets and be able to come up with effective solutions for our clients, which is a bit of a novel endeavor for us.”

“We’re recruiting heavily due to a retiring workforce”

Aside from hardened markets and inflationary increases, a common concern throughout the insurance industry is an older generation of employees reaching the age of retirement without a wealth of younger talent ready to fill a resulting excess of vacancies.

“We’re recruiting heavily due to a retiring workforce, and constantly thinking about having bench support,” Stavrakis said. “We are also finding ways to mentor and train this bench before the older generation retires to ensure a seamless transition.”

Part of this training is a direct result of the current hard market, capacity restrictions, premium increases and unpredictable rate changes.

“We must also be creative in mentoring a team, especially newcomers, to be able to deliver tough messages to clients in a more remote environment that is atypical of the insurance industry until more recently,” she said.