The Model

Our model enables MGU owners to monetize the value of their business, enhance operations, create operating and risk bearing alignment, imbed program portability into the business and maintain financial and operational control.

With Redwoods Managers, MGUs benefit from the combination of The Redwoods Group’s program management expertise and a capital infusion. This creates an alignment of operating and risk-bearing profits that is rarely formalized in our industry. Our investment does not take control away from the MGU and the reinsurance approach is not designed to dislodge the MGU’s current carrier relationships.

The model has three core components that benefit the MGU: Capital, Resources, and Enterprise Risk Management.

Capital
Redwoods Managers provides MGUs with either liquidity or a capital infusion. The minority investment infuses capital into the MGU without typical private equity demands of preferred return. We will partner with the MGU’s staff to strengthen the customer relationships and enhance risk-bearing results … benefiting both the MGU’s bottom line and ours.
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Resources
Redwoods Managers makes our skilled support staff available to the partner MGU. Our actuary can help you analyze loss data and correlate customer loss prevention characteristics with appropriate rate levels. Our CFO can provide critical financial and accounting insight, and our HR staff can help initiate employment practices that engage the heart and long term commitment of employees and their families.
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Enterprise Risk Management (ERM)
It offers liquidity and revenue enhancement, while providing stability and risk-bearing alignment for the MGU’s partner carrier. By adding additional reinsurers onto an MGU’s treaty, the MGU can protect themselves against potential rating downgrades and unpredictable changes in risk-bearing appetite with the partner insurance carrier. A key aspect of our approach to Enterprise Risk Management is portability.
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