Upland’s growth focuses on entrepreneurial underwriting strategy
Upland Capital Group (Upland) is capitalizing on their specialized growth strategy to build out its underwriting platform across three pillars, adding excess and primary general liability products to its current casualty focus.
“Upland’s strategy is to recruit “we-entrepreneurs” who consider the business of underwriting to be a ‘craft’,” said Upland CEO Todd Hart. “We enable our teams to be nimble, disciplined and profitable as they focus their experience, skills and creativity to craft underwriting solutions for our broker’s unique risks.”
“We’re building something for the long term and we’re being methodical about how we do it,” stated Jim Damonte, Upland’s CUO and president of insurance operations, “Our job is to be able to trade the cycle but also make sure we can manage the inevitable downturns.”
While the company is benefiting from cyclical tailwinds with increased submissions, the original goal for Upland was to launch a great company, regardless of the market conditions. Upland has seen increased growth activity particularly in their excess casualty division, led by Shanna Sweeney, senior vice president of excess liability underwriting. “The market is in flux, but it is still capturing adequate rate for the business we see, allowing us to continue to support tough classes and accommodate the needs of our insureds,” said Sweeney.
While Upland is seeing desirable opportunities within the non-construction, primary casualty space, there is a recognition of market challenges that need to be navigated to maintain long-term growth and profitability of the portfolio. “In addition to a trend of increasing pressure on the pricing environment, the general liability (GL) line itself seems to be getting more attention from standard commercial insurers, at least partially due to disruption in property and auto,” remarked Daniel Lee, Upland senior vice president of primary GL underwriting. “We continue to anticipate a competitively priced market within our business that will require a high level of underwriting and sales discipline. Proper risk and opportunity selection will be key to success with an expectation of more pressure on renewals as well as understanding that many carriers are hungry to diversify more into non-property/auto lines.” Lee added, “These dynamics can translate to increased renewal marketing activity demanding additional focus on relationships and an ability to be nimble to support customers with competitive underwriting solutions.”
Damonte added “Upland is steering away from commoditized lines of business and towards segments where it takes underwriting talent to deliver the desired results as well as where margins tend to be higher.”
“We lean into the tough stuff and maintain a principled approach to the exceptions we make. The industries we’re seeing with the tightest capacity deployments are centered around wildfire exposures, wood frame residential, agriculture, and complex auto” Sweeney also added.
One market that is heavily dependent on such economic conditions is construction. “Due to the lingering impacts of Covid on the job and housing markets and the resulting macrotrend shifts, rising interest rates intended to offset inflation, the potential risk of deflation and a recession, large swings in the US consumer confidence index (10 months of decline in 2022versus a 10% increase from June to July of 2023), impacts on project costs and timing due to skilled labor shortages as well as shifts in building material availability and costs, and changes in financing accessibility and loan requirements, many developers and their investors are facing difficult decisions regarding what to build, where to build it, and when they should begin construction,” stated Carl Dowling, Upland senior vice president of casualty construction liability underwriting. “While many insurance industry leaders are rightly describing the overall casualty sector as a hard market due to the likes of auto and habitational risks, the reality is that there has been a substantial influx of capacity targeting construction risks with what I consider to be misguided profitability assumptions.”
“As a result, a significant portion of this capacity is being deployed with rates and terms that I do not believe will be sustainable, especially when factoring in current US litigation trends.” Dowling added “It is my opinion that many of today’s participants in the primary casualty construction market will either have a staggered, but dramatic shift in appetite or pricing over the next five to ten years, or that they will exit the market entirely.” “While many newer GA’s are especially susceptible to the vulnerabilities created by top line growth expectations, even some of the largest carriers in the industry are pushing their primary construction units to meet hard market growth expectations in what I would argue is actually a soft market.” Dowling concludes “In contrast, Upland has a strategy focused on sustainability and profitable growth that is agile and capable of succeeding regardless of overall trends in the construction industry. We are strategically positioning ourselves to take advantage of the opportunities created by this market volatility.”
One of Upland’s largest books of business continues to be the excess transportation market which also continues to provide threats and opportunities. “Challenges continue to be the “nuclear verdict” and liberal legal venues for commercial trucking. The driver shortage and limited quality driver issue also still looms,” stated Mark Grossberg, Upland senior vice president of excess transportation liability underwriting. “We counter most of these challenges by only offering short limits and working with the best wholesale specialists in this niche environment.” “This strategy has given us aleg up in broker relationships over the myriad of new MGA’s targeting excess transportation that have emerged since Upland’s inception,” added Drew Stock, Upland senior vice president of excess transportation liability. “Certain niches within the trucking industry might continue to see some volatility, but the segment overall seems poised to continue to be steady from an exposure standpoint.”
In 2022, Upland’s first full year of operation, the company produced $186mm in gross written premium and generated a GAAP net profit of approximately $500k. The company’s premium production is expected to approach $300mm by year end 2023.
About Upland Capital Group
Upland Capital Group, Inc. is an AM Best rated “A-” VIII specialty property/casualty insurer headquartered in Dallas, Texas. Through its wholly-owned insurance carrier, Upland Specialty Insurance Company, the company markets, underwrites and services wholesalespecialty insurance products in select markets to include excess transportation, construction casualty, excess casualty, primary general liability,and excess public entity.
Media Contact: Blake Zipoy, Marketing and Communications, bzipoy@uplandcapgroup.com