Top 75 MGAs: Gallagher

Name of CEO of Pen Underwriting: Tom Downey.

Head office address: 67 Lombard Street, London, EC3V 9LJ.

Website address: www.penunderwriting.co.uk

Linkedin handle and follower numbers: www.linkedin.com/company/pen-underwriting-uk More than 12,340 followers.

Date business was established: 2015.

Gross written premium managed: More than £800m.

Capacity providers: Pen underwrites for a select group of insurance and reinsurance companies. With a minimum of A-rated security, our capacity partners include some of the best known insurers, reinsurers and Lloyd’s syndicates.

Key products/lines: More than 25 product lines including construction, cyber, directors’ & officers’, hazardous goods and environmental industries, household, intellectual property, marine, PA and travel, public sector, a range of professional indemnity products both UK and International, real estate, recruitment, risk managed commercial, specialist liabilities, solicitors PI and tech PI.

How many employees did you have on 30 June 2023? About 460, plus Pen utilises the skills and support of around 50 dedicated colleagues from within the group’s offshore Gallagher Service Centre.

How many male and female employees did you have on 30 June 2023? 38.5% female and 61.5% male.

Are you a member of the MGAA? Why? Yes, we are. In fact, Pen was one of its earliest members and supporters back when the MGAA formed in 2011, recognising that the dynamic, fast-growing MGA sector which now represents approximately 10% of the UK’s general insurance premium, needs specific representation and a coherent collective voice.

We are united by our focus on looking after loss ratios and demonstrating the value we bring to the market. The MGAA does a good job representing us and helping to raise the sector’s profile but we all need to support it as a body to ensure that it can effectively represent the views of quality MGAs here for the long-term.

It also has an excellent educational programme, offering members some first-rate talks and extensive online training facilities, which we’d encourage all members to take advantage of but particularly smaller members who may not be able to provide programmes in-house.

What is your biggest achievement to date? Pen is only nine years old and yet we’ve achieved so much in that time, growing from about £400m premium under management to more than £800m today, and well on track to realising our goal of becoming a £1bn underwriting and distribution business.

In that time we’ve significantly expanded our product range of specialist solutions – most recently adding marine, intellectual property and tech PI – and extended our branch presence and geographic footprint outside the UK for the first time.

None of that would have been possible, however, without the sheer hard yards put in by so many during those early years. Colleague efforts alone transformed this business from a super start-up of a dozen or more underwriting businesses and multiple legal entities into a single cohesive business, combining all the security and capabilities you’d expect from an insurance company but in an agile, entrepreneurial, multi-class multi-territory MGA.

Thanks to that transformational change, Pen has had the robust foundations upon which to build and accelerate our growth through strategic hires, technological investment and acquisitions, not to mention create a superb platform for our wider international expansion.

What has been the biggest challenge you have faced as an MGA to date? Every MGA ultimately faces the same ongoing challenge: ensuring you have sufficient quality committed capacity, to enable you to write the specialist business your underwriters are skilled in, and which offers the cover your brokers and their customers need, and at a rate that matches your growth ambitions.

Loss ratios will always be key in the MGA world, so we treat every pound of capacity providers’ money as if it’s our own. We work hard to maintain strategic long-term partnerships – some of our relationships extend back more than 30 years – and we’ll always be focused on capacity that shares our collaborative, transparent and flexible approach to business.

What is your plan to grow the business? Our strategy remains one focused on building a sustainable business, giving the same priority to organic and inorganic growth, and never chasing growth for growth’s sake.

That means that looking after our existing customers, to maximise customer retention and grow organically through effective collaboration and cross-selling, will always be just as important as inorganic growth.

When it comes to the latter, we continue to look for strategic hires and like-minded niche, growing businesses to acquire which broaden our product offering, distribution and geographic reach and we have a very healthy pipeline of opportunities.

Cultural fit remains the number one criteria for any acquisition and strategic hire. It’s got to be the right people, delivering the right business with the right approach. We’re not afraid to turn down opportunities; in fact, we could have reached our £1bn target by now if we’d acquired every business and hire we’d looked at.

We’re also actively looking at opportunities across EMEA where we can build Pen out internationally, whether through acquisition or leveraging the wider our group’s footprint to use existing infrastructure and operational support for the benefit of our brokers and clients. So, building from the ground up, but not from scratch – and at pace.

Underpinning that growth strategy is our continued investment in digitalisation and online distribution – more than £150m of our GWP is already digitally traded. Four years ago, the premium handled by our various online portals was less than £10m.

So we’ll continue to grow those platforms, driven by the desire to make ourselves easy to do business with. But for some areas of our business, e-trading may never be appropriate, such as our large local authority business written via our RMP team. Our growth therefore will also be dependent on maintaining easy access to our teams of specialist, skilled, empowered underwriters.

When we reach our £1bn GWP goal, we’ll not be stopping there. We’ll take time to reflect, and consider our next ambitious but achievable milestone to set us apart from competitors while best meeting the needs of our brokers, coverholders and capacity partners.

Click here to find out which companies appear in Insurance Post’s Top 75 MGAs 2023 list. Click here to find out how Insurance Post’s Top 75 MGAs list was produced. Read the previous entry here. Read the next entry here.