O'Brien on Sands Point aggregator flywheel

O’Brien on Sands Point aggregator flywheel: ‘Pick up business in places you didn’t expect’

Joining the Sands Point Risk aggregator could lead to improved market access and terms for Launch Environmental as it unlocks a distribution and reinsurance flywheel from shared broker and reinsurer relationships across the platform, said the acquired MGA’s CEO John O’Brien.

O’Brien spoke alongside Sands Point Risk CEO Dennis Kearns in a joint interview following the deal that took the Avesi Partners-backed MGA platform past $250 million in gross written premium.

Launch Environmental specializes in environmental liability for energy, infrastructure, construction, chemical, M&A and industrial sectors, with O’Brien having built environmental books at AIG, Ironshore and Ascot before founding the MGA.

AGGREGATOR AS FLYWHEEL

The flywheel O’Brien described runs on cross-pollination across businesses that are not directly connected on the underwriting side but share brokers and reinsurers on the back end.

“Even if the businesses aren’t really closely connected, the distribution and the reinsurance is,” O’Brien said.

“As we grow our business, and transactional liability grows, and stop loss grows, they’re touching brokers that are in similar places, or they’re touching reinsurers that are in similar places.”

This could have material consequences for the underwriting program, O’Brien said.

“You’ll start to pick up business in places you didn’t expect to, or have better terms on reinsurance that you didn’t expect to, because of the multiple touch points across the aggregated platform,” O’Brien said.

TIME IN THE BOX

O’Brien described environmental MGA growth as running on a time-in-the-box framework, with reputation accruing as brokers in early adopter geographies feed business and word spreads from there.

“Part of it’s time in the box, part of it’s people getting to know what your appetite is,” O’Brien said.

Launch Environmental is backed by A+XV-rated capacity, with submission volume having grown more than tenfold from the MGA’s early months, O’Brien said.

Geographic growth follows broker-by-broker expansion within large distribution firms, with O’Brien saying Launch has written only a fraction of available offices within its existing relationships with the largest brokers.

“As long as I continue to execute the strategies that got me to where I am with the offices I’m growing with, it’s just a matter of getting on board with the other offices and getting them to start to send us opportunities,” O’Brien said.

SPEED OF SERVICE

Launch’s differentiation against the larger incumbent carriers comes down to speed of service, O’Brien said, with one-day broker response and three-day policy issuance the operating benchmarks.

“We think a business that’s very close to customers, that can get back to customers in a day, that can issue policies in three days and provide a higher-level service overall is a huge differentiator,” O’Brien said.

The service tempo translates into broker preference when capacity is tight or appetite is misaligned at the larger carriers Launch competes with, O’Brien said.

STAYING IN THE LANE

With Sands Point now backing Launch Environmental’s growth and the broader platform layering new programs around it, O’Brien said the discipline at the environmental practice specifically is to stay focused.

“I’m generally not someone who’s like, let’s get distracted by this other piece that might add a million when there’s tens of millions in front of me,” O’Brien said.

“The lane that we want to be in has a lot of opportunity for us.”