Trevor Baldwin : Yes, the $10 million is correct, Elyse. And we are expecting about 300 basis points of margin accretion next year.
Elyse Greenspan: Okay. Thank you.
Trevor Baldwin : Thank you.
Operator: Our next question comes from the line of Yaron Kinar with Jefferies. Please proceed with your questions.
Yaron Kinar: Thank you. Good afternoon or good evening. I wanted dig in a little deeper into the Junipe Re initiative. I, I guess, what I’m trying to get to here is, from my understanding building, a broker – a reinsurance broker can be challenging especially when you need to pretty significant scale. So how are you thinking about that? And do you believe that it can be earnings or EPS accretive in short order despite what could be a significant investment in the platform?
Trevor Baldwin : Yeah. Hey, Yaron. Great question. We’re very excited about the launch of Juniper Re. As I mentioned earlier, we’ve long had on our strategic roadmap, the reinsurance broking capabilities as a result of both of its superior financial returns, but also the integral role it plays in the insurance value chain. So there’s just, there’s an immense amount of strategic value to us having that capability added in amongst our retail broking and MGA capabilities. As we think about the payback period here, we think it’s going to be relatively short and there’s a few reasons for that. But one, Jeff Irvin, 25 year veteran, deep relationships is building a world-class team. And so, they come with built-in relationships and they’ve done this before.
So they’re not having to learn how to do it again. Second, we have significant relationships across our business that yield real reinsurance broking revenues that we believe we will be able to take advantage of. And so, while we do believe that this will be a negative EBITDA business for us in 2024, we have line of sight to it being EPS accretive and cash flow positive and 2025. And that’s, that’s roughly how we’re thinking about it, which is a very rapid payback period for an endeavor of this nature as you mentioned.
Yaron Kinar: Yeah, definitely. And are you looking at targeting specific slices of the reinsurance market with us? I’m assuming that, or maybe I shouldn’t assume this, but will you be going after because smaller scale reinsurers? Or will you be going after some of the large multinational accounts as well?
Trevor Baldwin : Yeah, I’d say, initially, we’re going to be focused on kind of specialty treaty business out of the gate where we’ve got deep expertise around CAT property programs to say the least. But we envision kind of the strategic expansion of broad capabilities and specialization to serve all major segments in this market over time.
Yaron Kinar: Okay. One final one is Juniper Re going to be in one of the existing segments or will you be carving out a separate segment for it?
Trevor Baldwin : It will be in the UCTS segment.
Yaron Kinar: Okay. Thank you.
Trevor Baldwin : Thank you.
Operator: Our next question comes from the line of Josh Shanker with Bank of America. Please proceed with your question.
Josh Shanker: Yeah, look, people make lives changes and it looks a little bit more bottom. I mean, Chris and John are pretty young guys. Can you talk a little about what you said was a long time in the works, their plans to park the company, so we can understand that how that proceeded?
Trevor Baldwin : Yeah. Hey Josh. So Chris is actually here with me. So happy to have him chime in, as well. But and when we took the company public, Chris, and John, and I, about a week and a half before that we’re at an industry event sponsored by the Council of Insurance Agents and Brokers called the Insurance Leadership Forum. It’s an event that happens every October where the leadership of kind of the top 200 brokers around the country and, the top 100 to 150 insurance companies come together and spend time planning how we can solve challenges for our clients, create solutions et cetera. And as we were walking around that event, we observed to each other. How we were the youngest ones there. And Chris and John said to me that’s one of our competitive advantages we’ve got.
We have the kind of tenacity and the drive not only to take on big challenges, but to run fast and execute. And they said, we never want to be not the youngest people here. And so the commitment they made at that time is, we’re going to continue to recruit an incredible bench of talent. We’re going to mentor them and make sure that BRP is always known for having fresh, highly competent, highly capable, energetic talent. And so that’s what we’ve done and we work through a series of goals that we’d set out for Chris and John. And we’ve achieved those and frankly more. And so, I’m excited for them to enter that next chapter of their lives and spend more time with families in pursuing terrible endeavors. But they’ll continue to be close friends of the firm.
And as you’ll see, we also have multi-year consulting agreements with them. So that they’ll continue to be able to provide us with their fantastic thoughts and expertise. But Chris, why don’t you just share a little bit in your own words?
Chris Wiebeck: Josh, I appreciate it. Always nice to be appreciated. When you think about some of the goals post-IPO, if you look at the guidance we’ve issued for next year, we’ve basically 10x revenue. That was one of our goals. If you look at, what we’ve done in the IAS business, that’s now a national platform. If you go back to the first question queue today, there’s some real distress happening in the private equity broker side. If rates stay higher some of them have particular interest, accruing interest, underwrite a new re, report the other day, someone’s over a billion dollars kind of unpaid interest that’s picking ahead of equity. There’s probably going to be a lot of stress there. And so, in that world, some of where John and I focused a lot on M&A is probably more as Trevor said, organic hiring from people that are looking for a solid ship through the storm.
And I think the BRP is really well positioned for that. If you go back to our MIS business, at the time the IPO I think, do said certainly held the best MainStreet focused personal lines focused fast-growing. You look at where that sits today for us is Westwood with what we’re doing in Charlotte. We’re relatively the same size, relatively the same metrics on growth and margin as they are. And then if you look at our UCTS segment, what’s happened in the MGA, we had a fantastic renters business. That business is still fantastic today. It’s now a business that is launching new products and it is a broad-based platform. So, for John and I on a business standpoint, you look at our post-IPO goals and we were really able to check the box on every single one of them, feel like the company is super well positioned.
