Pen Underwriting CEO eyes more M&A to get closer to £1bn GWP target

In order to grow the MGA’s gross written premium, Pen set its sights on further potential M&A activity, while also focusing on organic opportunities.

Downey (pictured) said: “We ended 2022 with just over £720m GWP, and with the acquisition of Tay River Holdings [this week], that will bring us more than £90m GWP on an annualised basis. So, while life is not linear, we are ahead of where we expected to be right now.

“We are on target to reach £1bn GWP by the end of 2025, but we don’t want to chase for chasing sake. It’s about the people, the culture and the products that meet the needs of brokers and their clients.”

Adrian Scott, managing director of international and financial lines at Pen, expanded on how the MGA intends to grow.

He said: “We have to look at entering into new areas both geographically and business-wise as we want to expand. It is about finding niches, people and businesses that make sense for us and align with our culture and way of operation.

“We are open to looking at all sorts of things that makes sense within our criteria. I don’t think there is any limit on what we can do, but it has got to fit our framework for acquiring.”

People

According to Downey, the people within [a potential acquisition] are integral to whether or not they fit in with Pen’s framework.

“I want a real entrepreneurial driven business that is well governed, well controlled, respects loss ratios and delivers a great service to the brokers,” Downey added.

“The Tay River team have also disrupted the [marine] market through digitisation. With Vessel Protect in particular, Chris Goddard [founder and chief executive of Vessel Protect] and his team have built something that is creating new opportunities to meet the needs of brokers. We will continue to look out for the right people.”

Downey also detailed the importance of recruiting and developing talent this year: “I am very focused on our [existing] talent. We have invested quite a lot in both our executive leadership programme and our emerging talent as well.

“It is about making sure we look after our people, provide them with a place within which they feel they can add value and grow their careers. We also want to remain focused on attracting new talent.”

Marine division

Pen acquired Tay River Holdings and its wholly owned marine specialist subsidiaries Vessel Protect, Trafalgar Marine Trades and BMM Ports and Terminals for an undisclosed sum.

Founder and managing director of Tay River, Paul Hartley, said: “The business is very niche at the moment and we have a responsibility to our carriers to remain sustainable, produce good results and remain disciplined. That is very key in the current environment.

“We are ambitious as a marine division, but we will only grow when the market environment presents itself with the right conditions. We have to add value to our capacity providers, we have to look after the [delegated] authority they have given to us.”

Pen will retain the Tay River brands and the team will become part of the wider Pen MGA.

Downey concluded: “The [Tay River] team have worked really hard to create the brands it has and it is important that we look after them and continue to make sure that they retain that respect.”

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