An insurance company supported by billionaire Todd Boehly has lost nearly a third of its market value after revealing it relies heavily on one key business partner. Accelerant, a firm based in the Cayman Islands that went public in New York this July, disclosed to investors that most of its third-party premiums come from Hadron, an insurer started by Altamont Capital.
The announcement sparked concerns during a recent earnings call, which led to a steep fall in Accelerant’s share price. Analysts pointed out that investors might have overlooked how much Accelerant depends on Hadron. They warned that this reliance raises doubts about Accelerant’s ability to grow partnerships with other insurers independently.
Accelerant aims to grow in the specialist insurance area, covering risks like property damage and cyberattacks. While Lloyd’s of London still dominates this market with £55.5 billion in premiums last year, Accelerant reported $3.8 billion in premiums over the past year, a 53% increase from before.
Both Accelerant and Hadron operate in a fast-growing part of the insurance world focused on managing general agents (MGAs). These agents handle niche risks but rely on insurers and investors for capital and licenses. Their efficient business models have attracted interest from private equity firms.
Hadron, which launched in November 2023 with over $250 million from Altamont, acts as a "fronting insurer," moving business from MGAs to investors and reinsurers. Accelerant, founded in 2018 by Jeff Radke, helps evaluate MGA risks through its technology and acts as an intermediary.
At the time of its IPO, Altamont held a controlling 79% voting stake in Accelerant, with its co-founder Keoni Schwartz stating that dealings between the companies are on fair, market terms. Schwartz also mentioned that Hadron’s share of Accelerant’s premiums is expected to decrease as other partners grow.
Todd Boehly’s Eldridge Industries had about a 3% stake in Accelerant when it went public. Boehly, known for his sports investments, stepped down from Accelerant’s board earlier this year.
Still, the news that Hadron accounts for around 60% of Accelerant’s third-party premiums highlights the risks of depending largely on one insurer. This situation has made investors uneasy, especially given the complex ownership links in this lightly regulated, rapidly expanding sector of the insurance industry.