A startup insurance firm in Richmond activated its first policies Tuesday after getting an A- rating from a rating agency. And it hopes to be profitable by the end of this year.
The Kinsale Insurance Company, which has around 40 employees at the Paragon Place headquarters in Henrico County, hopes to grow in the specialty insurance industry, which sells insurance to companies that can’t get it from standard companies because of risk factors (for example, a physician who has been sued for malpractice several times).
Kinsale sells its policies through brokers and generally not directly to businesses looking for insurance products.
The company, which raised $80 million, sells the sort of policies that cover both property and businesses but that other companies don’t want to sell. Specialty insurance is the most profitable segment of the insurance industry, said Mike Kehoe, the founder and CEO.
“With high-risk accounts, if the underwriter knows what he or she is doing, it provides a high margin to the risk-bearer,” Kehoe said. “Companies get paid to take risk.”
Starting an insurance company is not a simple endeavor. The industry is highly regulated and a company must show cash reserves to cover claims. But adding another hassle for Kinsale was the fact that the company had to fight what Kehoe called a “nuisance” lawsuit from a local competitor.
For six years, Kehoe was the boss at James River Insurance. He helped get the company going in 2002 and helped it grow. He also helped sell it for $575 million in 2007. But James River said in a lawsuit that Kehoe committed espionage and unlawfully recruited its employees when he started Kinsale.
The case was settled in February when James River agreed to pay Kinsale $377,000. (You can read the settlement here). That’s less than the legal fees to fight the case, Kehoe said.
Kinsale also agreed to temporarily limit the number of James River employees it hired and agreed not to sell policies to James River renewal customers for six months.
“It’s unusual when Party A sues Party B and the plaintiff ends of paying $400,000. That speaks volumes about how meritorious their claim was,” Kehoe said.
“The lawsuit was never about trying to recover legitimate damages. It was trying to disrupt a competitor, in my opinion,” Kehoe said.
Kinsale will likely be hiring more underwriters later this year, Kehoe said.
More reading: Q&A: What’s so special about insurance?
A startup insurance firm in Richmond activated its first policies Tuesday after getting an A- rating from a rating agency. And it hopes to be profitable by the end of this year.
The Kinsale Insurance Company, which has around 40 employees at the Paragon Place headquarters in Henrico County, hopes to grow in the specialty insurance industry, which sells insurance to companies that can’t get it from standard companies because of risk factors (for example, a physician who has been sued for malpractice several times).
Kinsale sells its policies through brokers and generally not directly to businesses looking for insurance products.
The company, which raised $80 million, sells the sort of policies that cover both property and businesses but that other companies don’t want to sell. Specialty insurance is the most profitable segment of the insurance industry, said Mike Kehoe, the founder and CEO.
“With high-risk accounts, if the underwriter knows what he or she is doing, it provides a high margin to the risk-bearer,” Kehoe said. “Companies get paid to take risk.”
Starting an insurance company is not a simple endeavor. The industry is highly regulated and a company must show cash reserves to cover claims. But adding another hassle for Kinsale was the fact that the company had to fight what Kehoe called a “nuisance” lawsuit from a local competitor.
For six years, Kehoe was the boss at James River Insurance. He helped get the company going in 2002 and helped it grow. He also helped sell it for $575 million in 2007. But James River said in a lawsuit that Kehoe committed espionage and unlawfully recruited its employees when he started Kinsale.
The case was settled in February when James River agreed to pay Kinsale $377,000. (You can read the settlement here). That’s less than the legal fees to fight the case, Kehoe said.
Kinsale also agreed to temporarily limit the number of James River employees it hired and agreed not to sell policies to James River renewal customers for six months.
“It’s unusual when Party A sues Party B and the plaintiff ends of paying $400,000. That speaks volumes about how meritorious their claim was,” Kehoe said.
“The lawsuit was never about trying to recover legitimate damages. It was trying to disrupt a competitor, in my opinion,” Kehoe said.
Kinsale will likely be hiring more underwriters later this year, Kehoe said.
More reading: Q&A: What’s so special about insurance?