Accelerant (ARX) 46th Annual William Blair Growth Stock Conference summary

Industry trends and business model evolution

• Hybrid insurance models are emerging as a major trend, blending distribution and underwriting for greater efficiency and flexibility.

• Independent MGAs are outpacing traditional monolithic insurers, with the MGA market growing by 70%.

• Accelerant acts as a marketplace connecting MGAs with risk capital, earning an 8% fee on premiums sourced, managed, and monitored.

• The platform supports 296 MGAs across 22 countries, providing technology and support services to enhance risk selection and management.

• The addressable market for current operations exceeds $250 billion, with significant runway for growth.

Technology and data-driven advantage

• Proprietary technology enables real-time monitoring and management of MGA portfolios, improving transparency and control.

• Accelerant captures around 200 data attributes per risk, compared to the industry norm of eight, fueling advanced machine learning models.

• By year-end, 80% of premium will be covered by machine learning risk models, enabling hyper-segmentation and improved loss ratios.

• Technology-driven insights have reduced loss ratios and enhanced the ability to recover claims from responsible parties.

• The platform's combination of human expertise and technology delivers superior efficiency and effectiveness.

Financial performance and growth dynamics

• Exchange written premium has grown to $4.3 billion, up 24% year-over-year, with EBITDA margins expected to exceed 50% as the business mix shifts toward fee-based revenue.

• Most revenue comes from exchange services (8% fee) and minority interests in MGAs (18% commission on $1.3 billion premium), with direct insurance operations becoming less significant.

• The business is capital-light, aiming to minimize capital-intensive insurance operations and maximize fee-based income.

• 80% of annual growth comes from existing members, with net revenue retention at 122%, and new MGA additions contributing to future growth.

• Growth is driven by entire portfolio transfers from MGAs, not individual policy wins, supporting stable and predictable expansion.