New E&S carrier Richmond National launched with $70mn of capital

Investment banking specialist Joe Kavanagh has launched A- rated excess and surplus lines carrier Richmond National Insurance Company (RNIC) having secured more than $70mn of equity capital and recruited a team of largely former Kinsale or Markel executives.

RNIC’s parent is Richmond National Group, a newly formed entity backed by more than $70mn in start-up capital from investors including HF Capital, Bonhill Capital, WT Holdings and the senior management team.

Richmond National is led by director, president and CEO Kavanagh, who before forming the new business spent three years in Compass Point Research & Trading’s investment banking group. Prior to that, he spent 14 years at FBR & Co where he helped to build, and ultimately lead, the company’s insurance investment banking group.

Kavanagh’s career also includes time at First Union Securities, Marsh McLennan and CIBC Oppenheimer.

The new Richmond, Virginia-based E&S carrier said it is working with “a select group of appointed wholesale brokers” to write coverage for small to medium businesses.

“We are in an environment of constrained capacity in terms of capital and experienced underwriting talent in many lines and classes of business,” said Kavanagh in a statement.

“We have targeted niches where we see an opportunity for profitable underwriting. We believe that our strong, clean balance sheet combined with modern, cloud-based, technology will provide an excellent foundation on which to build a successful, customer-focused E&S carrier,” Kavanagh added.

RNIC adds talent

Phil Stephens has been appointed chief underwriting officer. He brings more than 30 years of property and casualty underwriting experience to RNIC, over 20 of which have been in the E&S space.

Stephens most recently spent nearly four years at Great American Insurance Group as assistant vice president of property, according to his LinkedIn profile. His career also includes seven years at Kinsale, and more than 12 years at Markel’s Essex Insurance Company, as well as stints at Fireman’s Fund and Continental.

Nicole Waddill has been named head of property and inland marine. Waddill most recently spent a decade at Kinsale as a commercial property executive underwriter. Her career also includes time at Essex Insurance Company and Continental.

Bob Linkous will serve RNIC as head of general and contractors casualty, having been an assistant underwriting manager at James River for the last six years.

Head of excess casualty Bryan Farrar brings over 30 years of industry experience to RNIC, the last nine of which were as an excess casualty underwriter within WR Berkley’s Verus Underwriting Managers platform.

Jeff Austin, RNIC’s head of professional liability, has more than 25 years of experience, and like Farrar, has joined from Verus where he spent the last decade. Farrar and Austin also worked together at Colony Specialty.

Other senior appointments include CFO Doug Carson, who previously worked within Compass Point’s investment banking group, and prior to that at FBR & Co and First Union Securities; chief strategy officer and chief risk officer James Flajser, most recently at FBR & Co successor B Riley Securities; and chief claims officer Aimee Venn, who has joined Richmond National from Ark Syndicate Management. Venn’s career also includes time at Markel.

David Vanalek has been named chief legal and compliance officer. He has joined RNIC after 14 years at Markel.

Scott Savage, previously of Ippon Technologies and Kinsale, has been named chief information officer, while Alex Albro, also formerly of Ippon Technologies and Kinsale among others, has been appointed chief technology officer. Jamie Bock, most recently at Ippon Technologies, will serve as chief human resource officer.

According to local news reports, Richmond National is looking to add another 70 jobs to its home office in the next three years.

AM Best assigns A- rating

The new E&S carrier has been assigned an A- (Excellent) financial strength rating from AM Best, along with a long-term issuer credit rating of “a-“. The outlook on both ratings is stable.

AM Best said the ratings reflect RNIC’s “very strong” balance sheet strength.

That balance sheet assessment reflects RNIC’s recent capital raise to support its planned premium growth, the conservative nature in which its investment portfolio will be established, as well as the protection offered by its comprehensive reinsurance program which the ratings agency said is “diversified among highly rated participants”.

“Given the cautious nature in which management plans to grow the business, capital is in place on day one to support the five-year written premium business plan,” AM Best added.

The ratings also reflect RNIC’s adequate operating performance, limited business profile and appropriate enterprise risk management, AM Best said.

RNIC is just the latest new entrant to the booming E&S market.

Earlier this year saw the launch of start-up Upland Capital Group, for example. That followed several start-ups and scale-ups already targeting the fast-hardening segment, including the rebooted StarStone US platform Core Specialty, Vantage, and the rebranded and repositioned Skyward Specialty.