June 20, 2022 — FORTRESS Insurance Co. is gaining momentum in its measured approach to expansion with approval to offer several niche coverages in Ontario.
The Calgary-based insurer was founded in 2004 and had provided third-party auto liability coverage in the rental car and airport services businesses in Alberta before a private equity firm led by Scott Tannas, the Canadian senator and founder of broker Western Financial Group, acquired a 50% stake in 2019. Mr. Tannas founded Western Investment Co. of Canada in 2015 after he had sold the broker.
Before its investment in Fortress, Western Investment Co. funded non-insurance businesses such as auto glass replacement, care homes, dairy products and consumer retail. Since it received Western Investment Co.’s investment, the insurance company has gained licences to operate in all four Western provinces to offer products geared toward niche customers.
In Ontario it has been licensed to underwrite property, liability, accident and sickness, boiler and machinery, fidelity, marine, legal expense and surety coverages and also to offer fronting services.
Fortress said the Ontario expansion is part of its plan to expand across Canada in specialty and surplus lines.
“There’s lots of opportunity for small, nimble players and there’s very few small, nimble players so it seems we’ve hit a good moment in the arc of the insurance market in Canada,” Mr. Tannas told Thompson’s recently.
“We are still participating (as a secondary insurer) in programs.
“We’ve managed to bring a lot of capacity forward that is outsize to our relatively small capital base because so much of it is heavily reinsured.”
Fortress definitely is a mouse among the elephants in terms of capital, but Mr. Tannas points to a growth in gross written premium from $5m at the end of its second year to a projected $12m this year.
“We are at the cusp of starting to plan the introduction of some of our own products as well,” Mr. Tannas said.
“It’ll be very specialized — we will not be competing with mainline companies.”
“What products might that entail? Stay tuned.” He said the entry into Ontario will double the size of Fortress’s operations — and provide greater competition in the province’s insurance marketplace.
Mr. Tannas told Thompson’s two years ago that the investors were planning to take a slow and steady approach with Fortress, which helped it weather the challenges of the pandemic.
Fortress CEO Shafeen Mawani said the company is looking forward to partnering with Ontario brokers and providing capacity in the hard market.
“Our focus will be participating in program business and supporting MGAs and brokers on commercial insurance products,” he said.
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