Scott Hanson, founder and president of new MGU CrossCover Insurance Services, believes “integrity is paramount.”
CrossCover has set its sites on middle-market excess and surplus property commercial business in the United States. In partnership with Orchid Underwriters Agency, the MGU offers limits up to $50 million per location through a panel of AM Best rated carriers and reinsurers.
“Beyond integrity, the compensation of an MGU should be tied to the results of those that support us,” said Hanson. “We should have ‘skin in the game.’ Every employee of CrossCover should celebrate financially when our supporters do, but we should not disproportionally prosper during the lean years for our carriers.”
Hanson, the author of Fearless Angels – a book he wrote about angels and demons to inspire his four teenagers – believes in discipline.
A CrossFit enthusiast, Hanson wakes up before dawn for an intense, grueling workout. “I started because I admired those men and women in the 5:00 am class; they roll out of bed, keep going, never quit.”
That same drive is needed to write business in the current hard market.
But the combination of a hard market, skyrocketing reinsurance costs, and the retraction of standard markets from certain occupancy classes and territories presented an opportunity, he said.
“Since most MGUs were focused on high-margin cat [catastrophe] accounts, the opportunity was to leverage our carriers’ Tier 1 cat and critical earthquake capacity to write E&S risks around the country, creating a more balanced portfolio while lowering reinsurance costs and reducing volatility to cat events,” said Hanson.
Hanson defines the middle market as accounts under $1 billion total-insured value. CrossCover focuses on the smaller, middle-market sector, under $500 million in insured value.
Unexpected losses like wildfires and Winter Storm Uri coupled with higher-than-expected loss reserves due to claim adjustment issues such as assignment of benefits, have made some carriers reluctant to offer capacity, said Hanson. “It used to be a year or two after a hurricane, the claims were settled and you were done. There is no longer that certainty.”
Hanson said, “Convective storms and hail events, such as in Colorado have also created coverage displacement.” In the last 10 years, hailstorms have caused more than $5 billion in insured damage in Colorado, according to the Rocky Mountain Insurance Information Association.
“When the standard markets pull out of an area, or an occupancy class, we go in and underwrite the business in a different way,” said Hanson.
When the standard markets pull out of an area, or an occupancy class, we go in and underwrite the business in a different way.

Launching a new MGU in the pandemic was a challenge.
“Even as we gained momentum, the Covid pandemic slowed our due diligence to a crawl,” said Hanson. “Before Covid, I would have had a meeting at a carrier’s office with a broad audience including most department heads. However, those meetings have been replaced with video conference calls that generally follow a path in which each department, such as actuarial, has to be satisfied before the next – underwriting, compliance, legal and operation departments – would entertain our business plan. We also lost some of the personal interaction, which is crucial for a start-up.”
Still, the MGU was able to gather carriers and is offering standard All Other Perils property, flood, and critical earthquake and equipment breakdown with plans to offer an alternative to TRIA (terrorism) cover.
Our limits are on a ‘per location’ basis, which allows us to offer full limits for those accounts that fit: one policy, one claim adjustor, one underwriter and inspection service and potentially fewer gaps in coverage, Hanson said.Hans
“Beyond our friendship, Brad Emmons, vice chairman of the board, and Steve Carlsen, CEO of Orchid, were looking to grow into the commercial E&S space,” said Hanson. “Orchid has an excellent reputation and are top of their class in the residential property market, so they were an excellent fit.”
“We will need a little luck as we get out of the blocks and earn premium, but CrossCover will strive to remain disciplined and underwriting driven so that we thrive through the soft cycles, as well as a hard market like the one we are in today,” said Hanson.