Mercator CEO: Preferred Concepts Deal Combines Wholesale Expertise, Strong Programs

Copyright 2010 A.M. Best Company, Inc.All Rights Reserved BestWire

June 8, 2010 Tuesday 04:40 PM EST

433 words

Mercator CEO: Preferred Concepts Deal Combines Wholesale Expertise, Strong Programs

Lori Chordas

NEW YORK

Preferred Concepts LLC has acquired wholesale broker Mercator Risk Services, which specializes in the placement of property/casualty and professional liability lines of business.

Terms of the transaction were not disclosed.

National program administrator Preferred Concepts will now offer agents and brokers enhanced placement capabilities through its proprietary and transactional carrier platforms -- something Christopher Treanor, president and chief executive officer of Mercator Risk Services and Preferred Concepts' senior executive vice president, said creates a stronger company.

He said Mercator's transactional wholesale expertise complements Preferred Concept's "strong programs and retail relationships. The combination creates a stronger company with enhanced retail and long-standing carrier relationships.

"Preferred has built a very successful program management business, largely concentrated in real estate along with some other lines," he said. "They were looking to be able to offer a broader solution set to their customers beyond proprietary underwriting solutions."

Mercator, largely a transactional broker, also "has always wanted to offer a broader set of solutions like some underwriting solutions to our customers. Now between both sides of the organization, our vision is to be able to provide a broad set of solutions to customers -- both proprietary underwriting and open brokerage," he said. "That will give us a unique position in the marketplace to offer customers full solution sets."

The company is starting with real estate, where Preferred has a strong position and "we've got a good transactional business as well," Treanor said.

The combined company, headquartered in New York, has 85 employees in Atlanta, New York, San Francisco, Hartford, Conn. and Westport, Conn.

"We're a national company and our aspiration is to expand by potentially opening other offices and looking at other acquisitions," said Treanor. "We want to be able to solve customer problems anywhere in the United States. We can do that now, but as opportunities arise, we want to be open to those opportunities."

In 2006, Trident III LP, a fund managed by Stone Point Capital LLC, acquired a minority interest in Preferred Concepts and its affiliates. Stone Point Capital, a global private equity firm based in Greenwich, Conn., manages several billions of dollars in committed capital to make investments in the insurance, employee benefits and financial services industries, according to Preferred Concept's website.

(By Lori Chordas, senior associate editor, Best's Review: [email protected])

June 9, 2010