Indeed. The very impressive level of ENA founder/insider...

Indeed. The very impressive level of ENA founder/insider ownership keeps on increasing...

This is a capital-light business with operating leverage. The quotes below are from the SDF recent results call - not on ENA per se, but highly relevant to ENA's underwriting agency (MGA) model...

Stephen Humphrys

Yes, you get slightly higher leverage, yes, in an agency. It's probably more like 80% as opposed to 70%. And then it really just comes down to that cost and how each particular business performed. As I said, I think where you might have had a slight imbalance this year, I expect some of that to reverse next year and normalize it all back out. So I wouldn't say there's anything you might call fundamentally different, ultimately, if you look over that, say, that 2-year horizon.

Robert Kelly

And also, just to give you a little bit more perspective on that, an underwriting agency can write a lot more business without necessarily exponentially having to put on more staff to do it, whereas a broker may be constrained to be able to write another 20% or 30% more business without having an impact on their expense line. So there is a different metric in underwriting agencies in terms of volume, not necessarily being followed by increasing expenses.

Stephen Humphrys

Hence, why the higher margins.

Robert Kelly

That's why the valuation mark-up in agencies, particularly the larger ones.

Doron Kur

Makes a lot of sense. And maybe just a bit more colour, Robert, on your point there around opportunities for agencies as insurers reposition product lines and distribution.

Robert Kelly

Yes. Look, I think that there's more and more where insurers are being more finite about what they want to write and so that at some products, they're dropping out. They're not as keen to write them, but they've still got to be sold into the market as consumers still wish to buy them. So in doing that, that allows an opportunity for an MGA to pick up the specialist line to fulfil that gap. And so -- and also in some degrees of how their reinsurance is now put together where they elect not to take certain CRESTA codes on in property, then that allows that part of the property section to go into the open market, which again allows us to more develop products to fulfil that gap.

End conference call transcript.

Full credit to "Mujo" on Straw Man for locating this very interesting broader commentary / SD&A among ENA's big brother of sorts (SDF).