Alex Blanco joined Vantage Group Holdings Ltd. as CEO of its insurance operations in 2021, about a year after the specialty insurer and reinsurer formed. Prior to Vantage, he spent about 16 years at Axa XL, a unit of Axa SA, and its predecessor company, where he held various roles in professional liability and other specialty areas. Business Insurance Editor Gavin Souter recently spoke with Mr. Blanco about developments at Vantage — which offers admitted and nonadmitted products in the United States and Bermuda — his strategy for growing its insurance business and the outlook for the market. Edited excerpts follow.
Q: What’s the current makeup of Vantage’s insurance business?
A: Our current product set includes construction as a vertical, and the products that are embedded in that are our contractors professional and pollution, subcontractor default insurance, environmental services and last but not least excess casualty.
We also have cyber, D&O, E&O, health care, political risk and credit, and excess casualty, which rounds out all our product verticals.
We also have MGA relationships that provide coverage in inland marine, commercial property and transactional liability.
We’re going to have other products launched by the end of 2023 and early 2024, so our intent is to continue to build those products that are relevant in the market where we can leverage our talent with technology enablement and the use of data and analytics.
Q: Other than the MGA business, are you steering clear of property?
A: We are investigating property E&S opportunities for 2024, outside of that MGA relationship.
Q: How much business are you writing?
A: We’re a private entity, so we tend to keep that close to the vest. I will tell you one data point: We will be growing our insurance segment by 50% in 2023 over 2022, and in 2022 versus 2021 we grew it to over 400%.
Q: Where do you see opportunities for growth?
A: We see a tremendous amount of opportunity in the E&S market. Given the evolving nature of risk — whether it’s geopolitical, climate, cyber, social inflation — the need for the E&S market has never been more relevant. Many of our product lines allow us to take advantage of that market.
I also see an opportunity for us to build capabilities in market segments that we just haven’t explored yet. If I look at our market segmentation, its upper middle market and large corporates. There’s a tremendous opportunity in small businesses and middle-market businesses.
Q: How would you access that?
A: It could be programmatic; it could be affinity. There is opportunity to do it both on the retail and wholesale basis, so we are agnostic. What we really are considering is where do the opportunities manifest themselves and where does Vantage, given its tech and data enablement, best serve those opportunities. It could be multichannel.
Q: You’re a startup insurer, so what are you doing differently?
A: Being a young company does have its benefits, such as lack of legacy technology, so our conviction around building for purpose is a distinguishing feature in our journey that differentiates us.
If I could just point to a few things in our journey thus far that I think we’re doing differently, it would be investments we’re making in building efficiencies. For instance, we just measured our new submission setup, and we’ve reduced it to the point where it’s now eight minutes per submission, to go from cradle to grave in terms of submission. We have the ability to set up new products, supported with tech enablement, in just about three months. Approximately one-third of our colleague base is embedded in data, tech and pricing. And the last part is the empowerment element to our underwriters and their ability to make real-time decisions.
Q: Established insurers have their own advantages in terms of established reputations and security and you’re trying to wrest business from them, so how do you go about that?
A: It starts with our talent — the average tenure for our insurance leadership team is 25-plus years. And having the ability to make quicker more decisive decisions has allowed us to punch above our weight class. We are gaining traction and we’re seeing more opportunity on primary layers. We’re leaning into those things that we do extremely well.
Q: So you’re moving down the towers?
A: Correct, and that was our vision as we were building our products. First it was excess layers on a surplus lines basis, but in certain lines of business where we have admitted capabilities we are now finding ourselves moving down towers because of our tenure and because of the capabilities that we’ve been able to build. Our promise was that we were not going to be simply a capacity player.
Q: How do you see the market developing?
A: We will continue to see positive rate trends in many of the lines of business that I mentioned earlier. There will be those lines of business that will continue to experience rate decline, but I believe within the next calendar year or so we should start seeing rate stabilization.
In D&O, where we’re seeing rate decreases — which has been a byproduct of the capital market where there’s a lack of IPO and SPAC activity — given the rate decreases that we’re seeing, there is going to be a point in time where we should start seeing rate stabilization.
The E&S market will continue to be an opportunity for growth and there will be a consistent need for capacity on complex risks.
Social and headline inflation will continue to cause concern. Items such as climate, supply chain and geopolitical uncertainty, and each of their individual or collective effects on risk, will continue to be a constant area of deliberation on appropriately priced solutions.
