Brown & Brown buys E&S property MGUs Orchid and CrossCover
Brown & Brown has agreed a deal to buy TowerBrook Capital Partners-owned coastal homeowners specialist MGU Orchid Underwriters Agency and its affiliate CrossCover Insurance Services, which began underwriting last year in the E&S commercial property segment.
The transaction includes all of Vero Beach, Florida-based Orchid’s MGU and wholesaling business, along with its high-net-worth segment and CrossCover.
Financial terms of the transaction were not disclosed, but the deal is slated to close by April 2022.
Orchid was projecting that it would underwrite more than $375mn in in-force premium in 2021 through its various divisions.
Orchid will continue to operate under the leadership of CEO Steve Carlsen, president and COO Kathy Cody and CUO Ross Bowie from its offices in Vero Beach and Tampa, Florida, while CrossCover will continue to operate under the direction of Scott Hanson from offices in Cypress, Texas.
Both MGUs will report to Chris Walker, president of Brown & Brown’s National Programs division, and will continue to operate as independent entities.
Orchid, which was founded in 1998 and describes itself as one of the largest personal lines MGUs, focuses on providing insurance solutions for homeowners in coastal zones as well as for high-net-worth customers.
Commenting on the deal, Orchid chairman John Lumelleau said: “Brown & Brown recognised our continuing success and the value we have built. It is especially gratifying to know that our leadership group that made this possible will have the opportunity to continue growing Orchid and CrossCover as part of the Brown & Brown National Program segment.”
Carlsen said the move to become part of Brown & Brown’s National Programs division will strengthen the MGU and help expand its carrier relationships, leading to more capacity and options for its insureds and producers.
“Orchid and CrossCover have ambitious plans, and we’re eager to join the team at Brown & Brown,” the executive commented.
Private equity firm TowerBrook bought into Orchid in December 2018 in a deal that bought out previous owner Gryphon Investors.
According to its website, for the past five years Orchid has grown written premium at a 14 percent compound annual growth rate and increased net revenue and Ebitda.
It launched a commercial lines division in 2020 when it also established CrossCover in partnership with industry veteran Hanson to target middle market commercial properties for wholesale broker clients.
Also in 2020 Orchid partnered with Homesite to launch a reciprocal exchange to initially target Florida homeowners business on an admitted basis, in a move first revealed by this publication.
Orchid is the latest property cat-focused MGU to be acquired in the last couple of years, after Nephila sold its Phil Bowie-led Velocity Risk Underwriters to private equity firm Oaktree in December last year, and Aquiline sold Wellington to Truist Insurance Holdings a year earlier.