November 10, 2021 by Canadian Underwriter Staff
Specialty managing general agent (MGA) RAISE Underwriting in Toronto announced an agreement to acquire Mississauga-based independent MGA United Surety. The acquisition is scheduled to close January 1, 2022.
RAISE CEO Matt Baynton said in a press release Nov. 4, “By combining the expertise of RAISE and United, we will be able to offer our brokers a robust array of products in the construction and real estate space.”
Founded in 2020, United Surety offers surety products to brokers and their clients in Canada and the U.S.
“We look forward to joining a team that shares our sense of urgency in dealing with our broker partners and finding collaborative solutions for their clients,” said Iqbal Bhinder, president of United Surety.
This latest acquisition is consistent with a gradual trend toward consolidation among Canada’s MGAs. Back in February, the president and CEO of one MGA noted private equity’s focus on the sector gives MGAs the tools to finance acquisitions.
M&A activity “will allow acquiring [and] merging players to grow their volumes and find efficiencies, while giving the targets of acquisition another avenue for asset sale,” said Stephen Stewart, president and CEO of Stewart Specialty Risk Underwriting Ltd. in Toronto. “MGAs may look to acquire other entities or existing books and teams, as they may perceive less risk involved in this strategy than ‘starting from scratch’ by simply creating a new department and hiring underwriters.”
Some have suggested the future may bring more consolidation because MGAs are battling for the same recycled accounts during hard market conditions, when capacity for these accounts is scarce.
Feature image by iStock.com/erdikocak