Levine: Shepherd will ‘win more’ with builder's risk-enhanced combined solution

(The Insurer) - Shepherd’s ability to now offer clients a broad range of construction industry-focused coverages means the MGU is in a strong position to “win more” business overall, CEO Justin Levine has declared.

This publication revealed in late March that Shepherd had secured capacity from Allianz to support the new builder’s risk offering.

The program offers baseline capacity of $75 million per project, which can be increased to $150 million, with appetite initially focused on non-combustible construction on a nationwide basis.

The new product complements Shepherd's existing casualty offerings, and means the MGU can offer broad P&C coverage for medium- to large-scale construction projects.

"The goal is to be a single market placement, covering the entire project on a lead P&C basis," Levine explained.

And Levine believes that with the builder’s risk offering now also in its product suite, Shepherd will “win more” business, and that is already proving true with the program gaining early traction.

“Clients and brokers are looking for more carriers that can be a single point solution for them," Levine told Program Manager.

"We want to be able to partner deeper and broader with our clients and builder’s risk is obviously very important coverage,” said Levine.

“We've built a really compelling project-specific solution on the capacity side, in terms of GL and supported lead excess…The growth on those product lines is really phenomenal, and (builder’s risk) is just an amazing complement to that product suite.”

And while the builder’s risk market has many players, Levine said few can provide the combined package Shepherd now offers, especially for standalone wrap-up projects that the executive said are currently “really exploding in terms of growth.”

TECH ENABLES STAFF EFFICIENCY

Shepherd will deploy the product through its existing underwriting team rather than creating a separate unit.

“From a broker perspective and from a client perspective, they're going to deal with one person at Shepherd that's going to be their underwriter, and that underwriter is going to have an account level view of the client relationship,” said Levine.

“We're going back to a time maybe many years ago, when there were fewer underwriters per account and deeper relationships that fostered better client experiences.”

“We want to bring that back through the use of technology and getting rid of the manual overhang of underwriting administration through automation.”

The builder’s risk product is led by Shepherd's head of inland marine Carl Feldhaus, who joined the MGU from Chubb in early 2024.

Shepherd has already written several builder’s risk accounts since going live, with buyers existing casualty clients or new business that has been cross-sold with other placements that were being packaged at the same time.

The builder’s risk launch represents the firm’s next step towards building a multibillion-dollar portfolio.

“Our casualty program is becoming quite meaningful in terms of scale and size. And that's been a three-year run where we've grown at minimum 3x year over year, and we're targeting the same type of trajectory for builder’s risk,” he said.

“We've grown for seven straight quarters on the casualty side almost always on an average of 25% or more quarter-over-quarter.”

FURTHER PRODUCT EXPANSION

The company has grown from 20 to 47 employees over the past year, and expects to reach 70 by year-end.

Work is underway on bringing Shepherd’s next offerings to market, with the MGU having announced the hire of Alex Casella from Chubb as energy practice lead in July.

As reported at the time, Shepherd is working to secure capacity to support a primary and excess program targeted at the energy vertical, and in particular the renewables and power sectors.

“Our runway position is even stronger than it was when we raised our last financing in November 2023,” said Levine.

“Our growth has outpaced our hiring since that time, so we don't feel like there's any inhibitor to the big plans that we have.”

COMPETING WITH INCUMBENTS

Shepherd’s competition largely comes from major incumbent carriers as opposed to other startups, although Levine said “there's not really anybody who looks or feels like we do for mid-market to enterprise accounts, commercial insurance.”

Those tech-enabled startups that do exist are generally SMB-focused, “or even smaller”, noted Levine.

Some of the ways in which Shepherd differentiates itself from the large incumbents and why it has gained traction is how it serves clients and “some things we can do around enhancing pricing”, both of which Levine said “nobody here can easily replicate”.

SHEPHERD SAVINGS A DIFFERENTIATOR

Another way in which Shepherd supports clients is through the MGU’s Shepherd Savings program, Levine said.

Construction clients are already using tools from tech vendors like Procore, Open Space and others to manage the expense of software deployments.

“(At Shepherd), we help offset that meaningfully, if not completely, through the Shepherd Savings program. And by adding more products we can offset further or cover the cost further of certain construction technologies.”

“And the other big, compelling pitch is helping clients save on upfront premiums,” Levine said.

“The motivation here is to further our relationships with our clients and brokers, but also to extend the benefits of what we've built through Shepherd Savings and provide clients with more ability to leverage their use of technology for further premium savings on lines business that are obviously significant in terms of dollars,” Levine said.