Affinity Group Underwriters was created in January 1997 as a spin-off from the merger of two Canadian companies.
North American Life Assurance Company (NAL) and The Manufacturers Life Insurance Company (Manulife) merged in 1996. NAL was Canada’s oldest and most successful affinity group insurance carrier. The co-founders of AGU, Stephen L. Wyss, Emma S. Parrish and Neil B. Watkins, were all employed at the time by NAL. Before forming AGU, the founders and key staff of the firm had created and managed the U.S. affinity group division for NAL growing it in six years during the early and mid-1990s from a start-up to $18 million of premium with a positive bottom line. In partnership with a U.S. carrier, Allmerica Financial (formerly State Mutual), an agreement was reached with Manulife for Allmerica to acquire the U.S. affinity business and contract with the new company, AGU, to operate it as a managing underwriter.
Markel, an international insurer also based in Glen Allen Virginia, appointed AGU to underwrite and manage niche, specialty health and accident insurance programs.
Neil Watkins, one of the original co-founders of the company, retired in June.
Allmerica, a property and casualty company, sells its group insurance division and exits the life and health business.
The majority of AGU’s business with Allmerica at the time was high-deductible association group major medical insurance. With increased regulatory requirements effectively shutting down associations as a group policyholder and the difficulty of achieving consistent profitability, AGU concluded that the association major medical business was no longer viable and refocused on life, disability, accident and supplementary benefits, moving those product lines to CIGNA.The market focus, however, remained on associations and affinity groups. That decision resulted in the loss of nearly two-thirds of AGU’s revenue and moved the company, for the first time, three years after going into business, into the position of truly being a “start-up”. The years 2001 – 2003 were particularly difficult as the enterprise was completely rebuilt.
AGU’s oldest active client relationship, The National Newspaper Association (NNA), began inauspiciously. With airline tickets in hand, Steve Wyss was preparing to attend AGU’s first NNA national convention scheduled for 9/11/2001. Needless to say, the meeting never took place but AGU has worked with NNA ever since.
Searching for a replacement product for the revenue lost from its exit from the major medical insurance market, AGU became one of the first product developer/administrators in the nation to create a limited medical product. The FringeMark plan was underwritten by Markel and designed for people who could not qualify for or afford traditional health coverage.
AGU and Towers Administrators, a New York-based third-party administrator started in 1966, created TABS, a strategic alliance for TPA services.
ACE appointed AGU as a managing underwriter for limited medical business and other accident & health products.
To separate the marketing and underwriting functions, a subsidiary company, Affinity Brokers & Consultants was formed.
Thomas Wyss, brother of Steve, joined the management team with primary responsibility for sales and marketing and opened a new national sales office in Naples, Florida.
Towers opens a satellite office co-located with AGU in Glen Allen, Virginia. AGU undertakes responsibility for expanding Towers’ business profile.
AGU acquired Student Insurance Services (SIS), based in Fernandina Beach, Florida. SIS created and was the broker for the Florida Prepaid College Plan life insurance program, a unique affinity group program underwritten since 1992 by North American Life and, subsequently, AGU.
Lloyd’s approved AGU’s application for Coverholder status in October 2016 giving AGU delegated authority to write and manage accident & health program business on behalf of certain underwriters at Lloyd’s.