Core Specialty launches Fronting Division

Core Specialty Insurance Holdings, Inc. has created a new Fronting Division, and hired Scott Snyder from Ambac Financial Group to lead the new specialty business unit as President of Fronted Programs.

Core Specialty launched in late 2020 after the private equity capitalisation and rebranding of Enstar’s StarStone U.S. operations.

The formation of its new Fronted Division marks its 10th specialty business unit and has been established in recognition of both the magnitude and relevance of this business line to the firm.

In 2021, this line of business produced $441 million of gross written premiums and $15 million of net commission revenue for Core Specialty.

Via its fronting operation, Core Specialty works with specialty program managers and reinsurance firms to design and underwrite customised insurance programs. The company says that it enters into these types of agreements selectively with program managers who have significant experience in specialty classes of P&C risk.

To lead the new Fronting Division, Snyder has joined from Ambac, where he most recently served as First Vice President of Corporate Development, tasked with supporting their dual strategies of acquiring MGAs and creating hybrid-fronting partnerships.

Prior to Ambac, Snyder spent three years with Acrisure, where he was responsible for managing investments for the company’s Ventures division, as well as developing various market partnerships and driving organic growth for the brokerage. Earlier in his career, Snyder served in a corporate development role at StarStone Insurance.

Insurance-linked securities (ILS) funds and investors use these fronting partnerships to access risk more efficiently and through rated balance-sheets.

The launch of its new fronting operation follows a partnership with ILS fund manager Integral ILS Ltd. and Amwins. Under this arrangement, Integral assumes US catastrophe risk that has been originated from Amwins’ MGA platform, with all policies issued through subsidiaries of Core Specialty.

Commenting on the formation of the Fronting Division and appointment of Snyder, Jeff Consolino, President and Chief Executive Officer (CEO), commented: “Forming a Specialty Business Unit focused on Fronting is a natural next step for Core Specialty given our focus on niche markets, our business unit philosophy and the success of our fronting business to date. Due to our broad licensure and product filings, we are positioned to support this business on a broad basis throughout the United States.

“We believe the Fronting business represents an efficient use of capital, and our objective is to utilize the combination of fee income and underwriting profits from our Fronting Division to produce attractive returns on allocated capital.

“We are excited that Scott Snyder will lead our new Fronting Division, focusing on casualty business in the areas of primary, excess, and reinsurance offerings. Growth in this area will complement the property fronting business we announced in January 2021, where we work in conjunction with Integral ILS Ltd., the independent Insurance-Linked Securities (“ILS”) fund manager, as well as with selected other program managers on behalf of reinsurance companies seeking access to catastrophe-exposed property risk.”