Example 4 - Specialist UK IFA Program

Program #22710


Program Profile

Program Title Example 4 - Specialist UK IFA Program
Program ID 22710
Capacity Seeker IFA Underwriters Ltd
Capacity Seeker Type Insurance Intermediary
Classes Professional Indemnity
Territories United Kingdom
Annual Premium £2,100,000
Main Products, Coverages and Limits Specialist IFA program
£5m LOI - primary layer
£3m LOI - excess layer
Deductibles from £10k to £100k
Contract Types Direct Insurance
US licensing requirements NA
EU licensing requirements Class 13 - General Liability, Class 16 - Miscellaneous Financial Loss
Distribution Channels NA
Brief outline of the program’s distribution The business comes entirely from a network of 65 retail brokers; most of the business is repeat business.
Brief outline of how risks are underwritten, rated and priced and policies issued We use our own specialist wordings
Strict risk management adherence and notification protocols
Significant effort is expended on evaluating risk management practices of IFAs, their definition and implementation.
Business Written Impacted by OFAC, UN, EU or HMT Sanctions No
Program Profile processes description Head Office is based in Leeds
Two roving underwriters travel around the UK meeting with brokers and clients
We have a quote-to-bind platform, but most business is renewal and comes in via email
All quotes are reviewed by 2 underwriters before issuance
Key renewal period around end of year

KPIs and Financials

Description the stage of maturity of this program Mature – Robust historic data and program analysis available. Typically, track record of 5+ years in existing operation with well-developed systems and controls.
Currency GBP
Underwriting Performance and Projections
  • 50% - 150% rate increases in last year due to capacity withdrawal
  • 50% Loss Ratio over last 4 years (favourable vs. industry loss ratio of c. 100%)  
Policies and Premiums
  • 50% subscription / 50% fully-placed
  • 0% lead on subscription placements
  • 85% primary / 15% excess
  • 25 claims notifications per year; only a few resulted in actual losses 
Claims and Losses
  • 25% total commission
  • 15% average broker commission
  • 20% profit commission; payable after year 3 until year 5
Operational KPIs
  • 30 direct clients
  • 40 brokers
  • 300 policies
  • £7,000 premium / policy
  • 3 in core team; 2 roving underwriters; support staff from rest of organisation
  • Underwriting head is former IFA
  • We focus on well-managed IFAs with 5-20 staff with a dedicated risk manager focused on public-market liquid investments
  • We avoid IFAs with discretionary investment authority, dealing in private investments, advising on emerging markets or highly volatile segments

Capacity Sought

What capacity currently supports or has historically supported this program, if any? NA
Why are you seeking capacity? NA
What authorities, limits and structures are you seeking for your program? Will this sit alongside or replace current capacity? NA
Types of agreement Binding Authority Agreement
Claims Authority Sought YES
Minimal AM Best Financial Strength Rating A- (Excellent)
Other Participating (Re)Insurers In Discussion
What are the proposed commercial terms for the program? NA

Supporting Information

The following program information is available if needed

Corporate information
  • Company Overview Presentation
  • List of Company Directors
  • Financial Statements / Management Accounts
Historic performance
  • Operational KPIs / Metrics
  • Bordereaux
  • Risk Profiles
  • Premium and Exposure Analysis
  • Summary Underwriting Results
  • Program Audit Reports
Business and financial plans
  • Underwriting Strategy / Approach
  • Competitor, Customer and Pricing Research
  • Business Plan / Renewal Pack
Underwriting, claims and operations
  • Proposed Binder / Slip Agreement(s)
  • Claims Handling / TPA Agreement(s)
Compliance and governance
  • Training Log
  • Product Conduct Risk Approvals
  • IDD / iPID Documentation
  • Company Risk Register
  • Broker Security Committee Approvals
Policies and procedures
  • Data Privacy and GDPR Compliance
  • Anti-Money Laundering
  • Sanctions Checking
  • IT Security

Capacity Seeker Profile

Insurance Intermediary

Legal name IFA Underwriters Ltd
Trading name(s) IFA Plus
Principal Address
Business Trading Bases
Year of incorporation 2010
Company Registration No. 456789
Local Regulator FCA
Regulatory reference No. DEFGHI
Country of Incorporation United Kingdom
Website http://www.ifaunderwriting.co.uk
Credentials and Membership
Brief description of the company seeking capacity Our MGA originally started out as a division of a broker which was spun out in 2018 to minimise conflicts-of-interest.
Our team's origins come from a strong risk management background for a variety of financial services businesses.

Fitness & Propriety

Have any principal personnel of the Capacity Seeker been charged with or convicted of a criminal offence other than a minor motoring offence? No
Have any principal personnel of the Capacity Seeker been a party to any legal action, or if any legal proceedings have been commenced to which your company is a party or are any such actions pending in which your company has been named as a defendant? No
Have any principal personnel been subject to any application for liquidations, receiverships, bankruptcy or similar proceedings or been subject to an administrative order? No
Have any principal personnel of the Capacity Seeker entered in to or propose to enter in to an agreement or assignment with creditors or otherwise acknowledge insolvency? No
Have any principal personnel of the Capacity Seeker been disqualified under company law? No
Have any principal personnel of the Capacity Seeker had a licence or authorisation to conduct insurance business refused, suspended, withdrawn or not renewed? No
Has the Capacity Seeker ever had a delegated authority from any insurer, including a Lloyd’s managing agent / syndicate terminated mid-term or not renewed by the insurer / Lloyd’s managing agent? No
Has the Capacity Seeker made any professional indemnity claims or notified insurers of prospective claims in the last 5 years? No

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