By Arleigh Kennedy – Stop Loss Expert
It’s frustrating how many people still don’t know Skyward Specialty Insurance is a direct writer of Stop Loss. Through our wholly owned subsidiary, Great Midwest Insurance Company (GMIC), we hold the paper, bear the risk, and stand on our own balance sheet. We aren’t renting paper. We are the direct writer.
MGUs have a place in our market, but partnering with one without auditing their financial backbone exposes brokers and plan sponsors to huge long-term risk. Unlike direct writers, MGUs rely on third-party paper and external reinsurance capacity they don’t control.
Before you partner with an MGU over a direct writer, audit these 3 pillars:
1. Capacity Continuity & Ceded Risk –
MGUs write on borrowed paper. If they cede most of their risk and hit a bad claims cycle, the paper provider can pull capacity overnight—leaving policyholders stranded.
Direct writers control their own capacity for the long haul.
2. Loss Ratios & Underwriting Discipline –
Volume-driven MGUs face massive pressure to price aggressively for quick market share. Unstable loss ratios lead directly to carrier exits, rate spikes, or sudden, aggressive laserings.
Direct writers prioritize multi-year loss ratio stability.
3. PE Backing vs. Balance Sheet Power –
Many MGUs are built on short-term PE cycles aimed at a quick exit horizon, driving erratic strategy and capacity shifts.
Direct writers offer predictable, long-term balance sheet stability.
The Bottom Line:
Look past the initial quote. Know who is actually holding the risk, inspect their multi-year loss ratios, and make sure the carrier behind your policy is built to last.