Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: For your Everspan business, you talked about the combined ratio being a little above 100. Is your goal to keep that below 100, and what does that translate into in terms of returns, ROE within Everspan? A: Thanks, Mark. In the short term, we're looking to get that combined ratio below 100. Longer term, we're aiming for a combined ratio closer to 90, which should translate to mid-teen ROEs.
Q: Regarding your longer-term objective of the $70 to $80 million goal, is there a rough split between Serata and Everspan? A: The split is not really a split. The distribution business will be the predominant growth engine, with Everspan being a strategic component. The growth, whether it's 85% or 90% plus, will be attributable to the distribution side.
Q: As you're launching these MGAs, how do you find the appetite in terms of carrier capital support compared to 6-12 months ago? A: We have access to multiple sources of capacity, including Everspan, Lloyd Syndicates, and our Bermuda reinsurer Cadenza. Capacity tends not to be an issue for launches or acquisitions. As portfolios mature, we expand into new market sources, typically third-party sources.
Q: On the buyback, what changed in the last couple of months that led the board to start it immediately? A: We committed to launching a program post-sale of the legacy business. Given our progress, including the shareholder vote and PRA approval, and the attractive opportunity presented by the current stock price, the board decided it was a good time to proceed.
Q: The $70 to $80 million long-term EBITDA target, is that a stretch goal or more conservative? What is the biggest driver for surpassing that number? A: It's not a stretch goal. The biggest driver is organic growth, supported by acquisitions and startups. We are optimistic about the business plans of our startups and expect Everspan to continue growing, focusing on profitability and ROE.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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