Ledgebrook raises $24mn in AFV-led Series A to support E&S expansion

MGA Ledgebrook has raised $24mn in a Series A round led by American Family Ventures, with the proceeds earmarked to support the launch of additional products, add talent and fund a captive to retain a portion of its business and align with its reinsurers, E&S Insurer can reveal.

Other participants in the round include Brand Foundry Ventures, which also served as a seed investor in the Gage Caligaris-led MGA, along with a new venture capital investor, Floating Point.

The E&S-focused firm was formed in 2022 and has so far launched a primary general liability and supported excess offering. Earlier this year the firm expanded its product suite by partnering with hybrid fronting carrier Obsidian for a new miscellaneous professional liability program.

Speaking with The Insurer TV about the Series A round, former Liberty Mutual actuary Caligaris highlighted the expertise and track record of lead investor American Family Ventures in the insurtech arena.

“What this money is going to allow us to do is to expand on the success we’re having across products one and two. It’s going to let us launch new products and invest in hiring more talent to build the next round of automation.

“It’s also going to let us put some money into the captive – as our premiums grow the capital need will grow, so it’s going to really pour fuel on the fire on some of the early success that we’ve had,” he said.

The executive said that the long-term plan for Ledgebrook is to become the largest, most successful insurance company it can, evolving into a full-stack carrier.

“We think we can beat the market on risk selection, on pricing, on all of these traditional insurance-type activities, in addition to having market-leading technology that allows us to process submissions, analyse results and iterate faster than our competitors.

“In year two we’re going to be able to participate on our own treaty with our captive, eat our own cooking and start to benefit from the great results that we’re seeing on the underwriting side, and I think that’s something that really sets us apart,” he continued.

The MGA has been ramping up its hiring in the last few months and now is at a headcount of 35, and on a trajectory to double its workforce over the next 12 months to support the addition of new product lines.

“We have maybe more than you might think for an early-stage MGA, and that’s because we’re building this foundation that will be able to support many lines of business and hundreds of millions in premiums,” said Caligaris.

Tech-enabled middle market focus

Ledgebrook’s technology stack is not aimed at replacing underwriting but instead at allowing it to process, rate and underwrite faster, removing friction from traditional process so its underwriters can better service its wholesale brokers, the executive explained.

It has also been collecting pools of data from submissions and third-party sources, building up databases to “be able to spin the flywheel on pricing faster”.

“Really what we’re looking to do is not reinvent the wheel, just make it spin faster,” he said.

Caligaris said that plans for this year include moving into unsupported excess as well as additional professional lines products. Ledgebrook’s focus is on the middle to upper middle market with minimum premium of $25,000 and an ability to go as high as $500,000 based on its current treaty.

“This is the size of policy that really does still need true underwriting, you need two hands on the wheel. We’re really using that traditional expertise, just making the process go faster and more swiftly for the wholesaler,” he added.

Watch The Insurer TV’s full Close Quarter to hear Caligaris’ thoughts on:

  • Navigating the current insurtech fundraising environment
  • Accelerating momentum in premium growth at Ledgebrook
  • Meeting wholesale distribution needs
  • Deploying technology and underwriting discipline to deliver results