Preservation Capital Partners (“Preservation Capital”), the financial services-focused private equity firm which last year acquired an interest in the insurTech-driven cyber and specialty lines MGA Ascent Underwriting (“Ascent”), has made a strategic investment in US construction-focused MGA Cove Programs (“Cove”).
Together the business will manage in excess of $200 million GWP, making it one of the largest independently owned emerging risk and specialty lines MGAs. Ascent and Cove will continue to operate under their respective market-leading brands. Each is a pioneer in speciality product development and distribution within their respective markets, supported by best-in-class underwriting and claims teams. However, senior management will come together to drive forward the continued creation of value for brokers, markets, and clients through product innovation and technology.
David Umbers, who is to become Executive Chairman of the combined group, said: “Joining with Cove will give us important critical mass. Like Ascent, Cove Programs are innovators; by driving forward together we will have greater breadth and resources to serve our brokers and clients. It will also extend each companies’ distribution, both inwards and outwards. We are excited by the combination and growth opportunity that lies ahead of us, and together will focus on continued organic growth with the objective of significantly scaling the business.”
Kevin Hastings, who is to become Chief Executive of the combined group, said: “We are uniting at a corporate level, however there will be no change in who does what from day to day. Instead we will realise synergies between our two entirely complementary businesses. Together we have no business overlap; only opportunity. For example, Cove’s clients include over 60 top US homebuilders and 70 top commercial general contractors. Ascent’s cyber insurance products will be extremely valuable to them.”
Jatender Aujla, a Partner of Preservation Capital, said: “Ascent has made significant progress since our initial investment just over a year ago, particularly in the areas of product development and distribution. Cove is an extremely impressive business with a focus on highly specialised niches generating superior underwriting and insurance placement results. The companies have highly respected brands, the loyalty of brokers and customers, and incredibly experienced management teams supported by industry-leading specialists. Together they comprise a very strong business possessing all the ingredients for controlled, successful growth focused on generating superior underwriting results while serving the broad needs of their brokers and clients.”
Terms of the transaction, which remains subject to regulatory approvals, are not disclosed.