With $60 million in equity capital supporting them, two veteraninsurance-industry executives, Pat Kilkenny and Bob Kimmel, haveformed K2 Insurance Services LLC, a managing general agency thatseeks to acquire other MGAs.

Kilkenny, former chairman and CEO of Arrowhead General InsuranceServices Inc., and Kimmel, former Guy Carpenter & Co. LLCexecutive vice president, aim to build a leading franchise in theprogram-business market.

Kimmel is serving as president of K2; Kilkenny, who sold hisinterest in Arrowhead in 2006 after he had built it to more than $1billion of premium, serves as CEO.

Endeavour Capital, a West Coast-based private-equity group withmore than $1 billion of committed equity capital under management,contributed funding to the new venture, as did Kilkenny andKimmel.

Describing K2's acquisition appetite, Kilkenny says it willconsider a variety of MGAs ranging from large, existing entitieswith diverse books of business to smaller MGAs that may specializein programs that focus on single lines of business or customersegments. K2 is open to opportunities in all lines of business andgeographies.

Kimmel says the new company has a different rationale than thatof insurers, reinsurers and other firms that, in recent months,have acquired MGAs merely as a means of growing in a softcommercial-insurance market.

“We believe the insurance market is beginning to turn, and thetiming is very good for our venture,” Kimmel says. “Programswritten by good MGAs will present new business opportunities forgrowth and diversification in the near future. We will be using ourexperience and relationships to help these businesses grow. We arenot just buying premium.”

In addition to acquiring, the company will also be developingnew programs with experienced underwriters in niche-insurancesegments.

Kimmel, outlining some advantages for MGAs, says that while K2“would not necessarily try to change [existing] relationships” MGAshave with insurers and reinsurers, K2 “would hope to build onthem.” In other words, “if MGAs are seeking additional insurancepartners, we have relationships with executives throughout theindustry worldwide and can help MGAs by bringing them newunderwriting capacity,” he says.

Kimmel, in his most-recent prior position at Guy Carpenter, wasresponsible for program business written by MGAs.

Kilkenny acquired Arrowhead Group in 1984, when it wrote oneproduct line: nonstandard auto. By the time he sold the company in2006, it recorded $1 billion annually in net-written premiums, withprogram business in commercial, personal and specialty lines ofbusiness. After selling Arrowhead, Kilkenny became athleticdirector of the University of Oregon, a position he held until June2009.