Execution is everything: how Banyan Risk targets specialty lines

What is the importance of this part of your book?

Banyan Risk launched 2021 as a specialty managing general agent (MGA) and brought much-needed capacity to the directors’ & officers’ (D&O) sector. Focusing on hard-to-place D&O insurance risk solutions in complex risk areas including life sciences, global initial public offerings (IPOs), the technology sector, and special purpose acquisition companies (SPACs), Banyan wrote $100 million in premium in the company’s first 18 months.

Built with a lean operating model, best-in-class technology, and team of six, Banyan has filled a much-needed gap in the market and shown excellence in underwriting, and has been profitable since day one.

Which lines are most profitable at the moment?

Despite the current news headlines of continuing rate falls and challenging market conditions, we still see opportunity in the D&O line within specific geographies and industries. While there has been significant margin compression for larger traditional accounts, we are excited about other business in the property and casualty space. Our goal is to continue to expand lines of coverage and geographies.

In which lines do you see the greatest growth potential?

Our core initial business of D&O still has significant growth potential as we expand geographically. We believe elements of transactional risk have a lot of potential, as well as pockets in the property and excess casualty space.

How do you make decisions around which lines to target and invest in?

It is simple: we find and invest in the best underwriting talent in each line of targeted business. We overlay technology and artificial intelligence to help improve decision-making and significantly improve the underwriting process. And we find strong, long-term capital partners.

How far out do you set your strategy in this business?

This is one of Banyan’s unique advantages in the industry. We as co-founders have a unique 30-year plan in place to become one of the most profitable MGAs in the global speciality insurance industry. Banyan’s evolution plans follow the analogy of the Banyan tree it is named after. A Banyan tree slowly develops accessory trunks from adventitious prop roots, allowing the tree to spread outwards indefinitely. With a long enough time frame the Banyan tree will be the largest tree in the forest.

We have plans to drop roots in different countries with different product lines. The goal is simple: be loud, be different and be data-driven. Execution is the exciting part.

Banyan is aiming for one geographic expansion and one new product line in 2023. With support from its backer SiriusPoint, Banyan will increase its presence in Canada, and set up subsidiaries in New York, London and Singapore over time. One example of a potential product partnership involves professional athletes and real-time health data to mitigate the chance of loss and optimise their performance.

How do you decide what capacity to employ in lines?

As mentioned above, the plan is simple. Execution is the exciting part.

How hard is it to ensure you have the right talent in place?

If you build the right platform, with a great culture, best-in-class technology, and very strong partners, the right talent will be as excited as you are to join. Unless a potential new team member responds with a resounding “yes” to our initial discussions, we will not continue. It is about so much more than loss ratio when building an enduring company, having a great culture, and enjoying that journey.

Those elements are easy to leave behind, and while the loss ratio is fundamental to future success, other foundation blocks are key. And in terms of finding the underwriters with the best track record, we independently verify that to ensure we are aligned in our long-term vision.