Three is the magic number as IAP positions itself for a capital year ahead

The Romans had a talent for pithy pearls of wisdom, so former Latin scholars will recognise the phrase omne trium perfectum by its modern translation: all good things come in threes.

It was also the response from veteran (re)insurance banker Tony Ursano when we first asked him about the plans for his latest venture, Insurance Advisory Partners (more commonly known by its three-letter acronym IAP).

Ursano is a rare specimen. He is, after all, one of few leading sector bankers with a profile on a par with industry CEOs and leaders. In part, this is because he speaks candidly and passionately about industry issues rather than hiding behind the comfort blanket of spreadsheets and anonymity. But the main reason is that he is almost certainly unique in having now built from a standing start three (re)insurance investment banking businesses.

The first, of course, was Willis Capital Markets & Advisory, founded after Joe Plumeri persuaded Ursano to move from Bank of America to the global broker to launch the new division. The second was TigerRisk Capital Markets & Advisory, where he joined forces with another industry silverback, Rod Fox, to become president of the now Howden Group-owned reinsurance intermediary.

IAP, in contrast, was initially just Ursano and his co-founder, the insurtech funding expert and fellow banker David Kimmel, when it emerged in 2021.

Now in its third year, it felt like a good time to check in on IAP’s progress. We start by asking whether the launch timing was unfortunate considering the economic and political gloom caused by war in Europe and the Middle East and the uncertainty it created.

New Yorker Ursano is the sort of man who could have inspired the term irrepressible, so it was no surprise that he immediately countered this negative slant.

“These are exactly the challenges that our clients have to face in their business every day and so the timing for IAP was perfect.

“Tough times call for smart decisions. Thinking differently and creatively about strategy and being thoughtful about how to optimise capital and minimise its cost. When times are easy, any executive can call up an alphabet house and get slick presentations from a recently qualified graduate to justify continuing the status quo.

“But IAP is never satisfied. Our mission is simple: we want to build the highest quality insurance investment banking business in the world. Our firm is all about our clients, knowing their business, understanding their challenges and thinking about what we would do if we were in their shoes. When we do that, we deliver the best and most objective advice that we can.”

Certainly, IAP has not allowed its relative youth to constrain its results. Just in the MGA space alone, IAP has been involved in four successful transactions, including representing the lead investor in the Fidelis MGA, the sale of Riskmith to Amwins, the sale of ISO to NSM and the bifurcation of GeoVera in its sale to SageSure. The firm currently has an additional five MGA mandates in house.

It should be said that IAP is also now much more than a two-man team. Clive Buesnel – the well-known London market executive who led the turnaround and £500mn+ sale of Tysers to Australian retailer AUB in 2022 – was a high-profile hire late last year and in doing so took IAP’s headcount in the US and London to more than 20.

But Ursano is still on the look-out for more talent, expertise and knowledge. “The engine room is running at 110 percent. Once we get to 35 to 40 people we will be at the pace and a scale where we need to be. Just watch, it won’t be long.”

One reason why Ursano is so keen to continue investing in talent is that he detects a golden opportunity.

“There is almost always capital available for the best ideas, management teams and businesses but it is equally true that investors have become significantly more interested in and enthusiastic about the sector in 2024 – both for its defensive qualities and limited correlations but also because of its strong earnings potential. Our job is to marry this interest with structures and opportunities that appeals to smart money and makes sense to business owners and management teams.”

H1 data certainly backs up his thesis.

And the IPO window – which was almost shut 18 months ago – is now cracked open.

“On average, IPOs in the US were down 19 percent last year. That's improved significantly and there have been some stunning successes.”

This includes Ursano’s old shop, Hamilton Insurance Group. Ursano joined as CFO in 2019 with a mandate to prepare the private equity-owned business for an IPO before co-launching IAP.

IAP acted as financial advisor to Hamilton on that transaction. The work paid off as Hamilton stock is up 30 percent since its late 2023 New York IPO. Other notable sector IPO successes in recent times include Bowhead Specialty, also up 30 percent since its May listing; Skyward Specialty, up 117 percent since listing in January 2023; and, most recently, The Woodlands Financial Group. The company’s share price since its Nasdaq listing in July is also up by … yes, you’ve guessed it, 30 percent.

Ursano predicts there will be more activity – and soon. “There is a significant IPO pipeline. In fact, there has to be a pipeline because getting a business ready for the public markets takes time. Investors are demanding and they need time to get to know a business and to see that management are delivering on their promises.”

He wouldn’t be drawn on names but says he expects more announcements before year-end.

“A number are nearly ready to go.”

Buesnel agrees, adding: “There is pent-up demand that exists on both sides of the Atlantic from all of these private equity-owned businesses searching for liquidity and that is creating a huge opportunity for us.”

But does that extend to London? After all, the London Stock Exchange appears stuck in a rut compared to New York and with it a valuation gap has opened between the three listed Lloyd’s insurers – Beazley, Hiscox and Lancashire – and their counterparts in the US and Bermuda.

“London IPOs remain tricky. There is no doubt. I used to make the argument that even though London is a smaller market, the overall supply-demand dynamic was better, and it could be possible to get a better multiple, better valuation and more liquidity in that smaller market – that simply hasn't held recently.

“But we wouldn’t rule it out in 2025. There are some credible candidates and there is no doubt that investor interest is growing on both sides of the Atlantic. However, we expect most activity to be concentrated in the US.”

IPOs are one of a number of capital trends that IAP is predicting for 2025.

Buesnel – who works closely with Bhaven Pathak, the former Canopius head of M&A who joined IAP as partner and head of UK and Europe in May 2022 – says (re)insurers, MGAs, intermediaries and all investors are increasingly open to different solutions to access liquidity and drive growth.

He points to the bifurcation last year of Richard Brindle’s Fidelis into a listed “balance sheet” business and a separate underwriting arm as an example that is piquing interest.

Indeed, the concept has already been replicated with the fast-growing cat-focused US MGA SageSure acquiring the MGA arm of GeoVera as part of a wider deal that also saw carrier partner SafePort Insurance Company merge into GeoVera’s carrier operations. IAP advised GeoVera on the process.

“We're working on a couple of others,” Ursano adds. “And I think we’re going to see a lot more over the next few years. M&A is picking up as companies begin to position themselves for strategic growth during the next stages of the pricing cycle.”

Another innovative structure is the reciprocal exchange. Interest is growing in the US concept because investors value the structure, which allows specialist underwriting to benefit from near permanent, less expensive capital.

Indeed, Ursano says IAP is working on at least three potential new reciprocals – and overall has over 25 live mandates across capital raising and M&A transactions.

We ask why clients are choosing IAP over more established alternatives.

“We’ve proved ourselves during the tough times. We’ve proved the New York-axis London works; we’ve proved our investment and commitment to the business and to the idea that a deep combination of industry experience with banking experience is what clients need.

“It's hard to get specialist advisory right in big organisations, there's too much siloed between teams and geographies. We don’t have that problem and it is paying dividends in the way we can nimbly respond to what our clients need.”

As if on cue, this prompts Ursano to recite IAP’s own mantra which, naturally, is also three letters.

“What we strive to deliver every day is an Amazing Client Experience or, as we call it, ACE.

“In practice, what this means is a constant dialogue amongst the team as to how do we bring more tailored, creative and precise ideas to the table for the client. If we are taking the same old shopped ideas to our clients, then we have failed.”

He concludes with a confident flourish.

“We love what we do, we love what we are building and we love the momentum we have. We want to be amazing!”