Fortegra Chairman and CEO, Rick Kahlbaugh, sat down with Insurance Business America (IBA) to talk about Fortegra's next chapter following it's recent acquisition by DB Insurance Co., Ltd. In the interview, Rick talks with IBA editor Paul Lucas on the acquisition, how the Fortegra is positioning itself for more growth, and his outlook on program business and the MGA market.
Watch the full interview here and read a summary of key points below.
Why is the DB Insurance Co., Ltd. acquisition of Fortegra a win for both companies? What will change for both partners and customers going forward?
Over the past few years, Fortegra has experienced extensive growth, and there was a need for capital. One of the more appealing options to Fortegra was the acquisition by DB Insurance. For DB Insurance, they had the capital but were looking to expand into the U.S. Although the original goal was not necessarily to enter Europe, after doing due diligence on Fortegra, they found entering the European and UK markets an attractive enterprise as well. With the acquisition, DB Insurance received the opportunity to be a global enterprise with one transaction, and Fortegra received the capital breadth to continue to expand.
How is Fortegra pursuing growth in a softening market?
There continue to be opportunities, even in a spotty market. Fortegra works with high-quality agents that continue to offer attractive business, although the market conditions require a little more caution. Additionally, Fortegra focuses on niche business, which tends not to experience dramatic market swings.
Why rely on specialized MGA underwriting expertise rather than building it in-house?
Fortegra remains dedicated to the program space, because as the industry transitions — extremely rapidly — to complex risks that often morph, it requires a specialized underwriting approach. The Fortegra team believe that delegated authority through managing general agents or underwriters allows MGAs to build staff with specific expertise, which Fortegra can then benefit from. For example, it would be hard to find a broker who represents tree trimmers over power lines in California, but Fortegra found an MGA who knows the space, saw the issues as an active tree trimmer, and then built an agency to create the solution. It's very common in the complex economies of the US and Europe.
How is AI being used to improve the underwriting and agent experience?
Artificial intelligence (AI) is a powerful technology, but there are many different strategies with how companies can implement it. At Fortegra, the use is typically to improve the environment that agents work in, helping to build sophisticated rating models or enhance data, for example, and then to free up their time to focus more on underwriting than administrative work.
