Palomar to offer fronting
Specialty insurer Palomar Holdings, the holding company of Palomar Specialty Reinsurance Company Bermuda, has entered the fronting sector in the United States. Its new business PLMR-FRONT will partner with reinsurers, insurance carriers and managing general agents on customised insurance programs.
It will provide A.M. Best “A- (Excellent)” fronting paper on an admitted and non-admitted basis through Palomar Specialty Insurance Company and Palomar Excess and Surplus Insurance Company, respectively. It will target lines where traditional insurance is difficult to source, the company said, including cyber, non-standard auto, trucking, warranty and workers compensation.
The business will allow Palomar to act either as a non-risk bearing insurance entity with a pure fronting model or participate in risk through a hybrid model.
“PLMR-FRONT is a logical extension of Palomar’s franchise in the specialty insurance market. It represents an entrance into a sector that will generate new income streams and compelling risk-adjusted returns for our shareholders,” said Mac Armstrong, chairman and chief executive officer.
“Ultimately, the fronting sector represents another opportunity to capitalise on changing market dynamics and dislocations while adhering to our focus on sound underwriting and profitable growth,” he added.
Earlier this month, Palomar announced new appointments to its underwriting and reinsurance teams: Ty Robben joined the underwriting leadership group at Palomar as senior vice president, casualty underwriting; Gerrit VandeKemp as vice president, casualty underwriting; and Chris Cebula as senior vice president, reinsurance.
