Amwins’ Purviance: Employee ownership is key to culture, more investors on the horizon
Amwins’ recent recapitalisation transaction with its existing shareholders solidified “the next step” in its long-term journey of “building a perpetual business”, the wholesale broker’s CEO Scott Purviance has told The Insurer TV.
As part of the deal, Dragoneer Investment Group, Genstar Capital, SkyKnight Capital and employee shareholders purchased $1bn in equity from more than 375 Amwins employee shareholders and Canadian pension fund Public Sector Pension Investment Board (PSP).
Purviance noted that timing was crucial to the deal, with shareholder needs lining up with the firm’s liquidity goals.
“We have twice a year opportunities for employees to get liquidity as a private firm, but as a larger transaction, where certain employees can sell a greater amount, this was the first time in eight years,” said the CEO.
The changing demographics of Amwins’ 1,500 employee shareholders was another reason the recapitalisation made sense to Purviance.
“When you look at the demographics, we have a tremendous number of younger employees that have become shareholders over the last, you know, eight to 10 years, but then we have others that are now retiring or close to retirement. And so, liquidity means different things to different people,” he said.
The transaction also cemented Amwins’ commitment to long-term employee and institutional ownership, which Purviance said gives it certain advantages over competitors.
“ When you have a smaller, consolidated institutional shareholder base there, it's easier to have an alignment and agreement with strategy,” said Purviance.
More partners on the horizon
While all four of the firm’s institutional partners were keen to increase their stakes, Purviance added that more partners may be forthcoming.
“And, you know, we were very confident we could have gone out and brought in, you know, a fifth or sixth partner, and we may very well do that down the road,” he said.
Purviance believes the firm’s independence is part of the attraction for investors. He added that substantial growth in private capital markets has given Amwins a much longer runway to remain private.
“And we still have a big runway ahead of us there,” Purviance said.
“Not being owned by a retail broker makes us a much better partner for all our retail clients to focus on them and delivering for their clients and delivering the best possible solutions we can for them, and not having any of that conflict of being owned by a competitor client,” he added.
Looking ahead to 2024
While recent years have been a wild ride in many ways for property cat, Purviance said he’s looking forward to a much more “rational market” in 2024.
“But I still think we have the tailwinds of the market behind us going into 2024.”
Purviance said he will be watching the 1.1 reinsurance treaties as they renew, making sure rates are keeping up with loss cost trends.
As for what could curb the current E&S market expansion, Purviance pointed to the market’s cyclical nature.
“W hen rates get too adequate or slightly greater than adequate, you're going to have, you know, capital chasing and wanting to be deployed in that, and then therefore, rates will mitigate. And so, we don't think that is gone out of the E&S market at all.”
Purviance expects that future soft markets won’t be as long or as deep as in previous years.
Watch this 15-minute video to learn more about:
- Amwins’ $1bn recapitalisation transaction with its existing shareholder group
- Why timing played a big role in the deal
- How the transaction appeased employee shareholders and PSP alike
- Why independence is paramount to Amwins and CEO Purviance
- Amwins’ expectations for 2024 and the 1.1 renewals