AM Specialty looks to build its direct book

Dominick Tassone (pictured) is a man on a mission. On the back of four decades working in the insurance business, he accepted a new challenge in January this year—as chief underwriting officer, AM Specialty. This is the eighth startup he will have worked for in his career—but no other venture has energised him in the way this has, he says.

“I love a challenge and the opportunity of building something from the ground up,” he told Monte Carlo Today. “We have no legacy business and we have the ability, based on critical data, to make sound decisions on programme business that fit within our underwriting platform.

“Strategically, we are building a profitable portfolio of programme business, leveraging long-term relationships with programmes that have yielded underwriting profit throughout the changing market cycles.

“I am very excited about this project and the opportunities we have to build something special.”

AM Specialty, an Arizona-authorised domestic excess and surplus (E&S) lines carrier and accredited reinsurer based in Dallas, Texas, was launched in December 2022 by parent company AM Holding Company. The new entity was formed alongside AM RE Syndicate and AM Star Claims, all firms operating under the AM Holding Company umbrella.

Under the stewardship of Shevawn and Simon Barder, the founders of AM Holding Company, both former Lloyd’s veterans, the company positioned the launch as an opportunity to write business using its own capacity. It is in the process of securing licences across all 50 states following its transition into a full-stack balance sheet carrier.

Tassone has been brought in to execute that vision. He feels a solid start has been made—but is keen to leverage further opportunities he eyes in the market.

“I’ve been extremely pleased with what we have achieved this year,” he says. “We have leveraged many of our prior relationships as we build out our long-term programme business platform.

“While we’re a small team, around 20 employees, everyone within AM Specialty has a clear understanding of our business model with respect to underwriting, claims, data/analytics, and legal. The team also understands the big picture as we look out four or five years into the future, which excites me.”

Tassone stresses that the business strategy is to work with a select number of quality programme partners whose business model produces predictable loss ratios based on their underwriting expertise, unique insuring agreements, specialised claims and loss control services, and dedicated distribution networks.

“As an underwriting first company, there is no pressure to write top-line business for the sake of hitting a premium target. It is all about underwriting profit.

“Programmes where price is a driver will not fit into our underwriting model,” he says.

Open doors

Tassone believes that current market conditions provide AM Specialty opportunities to speak with reinsurers about their approach toward the programme business, opening the door to more direct and reinsurance opportunities. He is also clear that the long-term plan is to write more direct business and grow this as a percentage of the portfolio over time.

“That is the ultimate goal: to leverage our longstanding relationships to write select direct insurance business. Capacity is key, and as markets decide how to deploy their capacity, we have a plan in place that opens the door to more programme opportunities.

“Our current business plan stretches out to 2028. This includes a direct and reinsurance business pipeline, and it is a question of what we write directly and what we assume as we build our portfolio for the future,” he explains.

The emphasis at present is on property, short-tail casualty, and cyber, while AM Specialty also has significant underwriting experience with auto physical damage, motor truck cargo, and pleasure craft. It considers all this through a sharp lens of diversification in terms of both geography and line of business.

“While the future is bright, we will take a cautious approach to the opportunities that come to us. Regarding existing business, if we see an area that is performing at or better than expected, we will look to expand those segments. Alternatively, we will work with our programme partners to execute improvement plans in areas that are underperforming.

“While the journey ahead promises challenges, we believe our unwavering commitment to strategic growth, underwriting excellence, and collaborative partnerships will position us at the forefront of progress within the programme insurance landscape,” he concludes.