Emily Canelo – Obsidian Insurance Holdings Inc.
There are always opportunities for those willing to take a risk. A calculated risk, that is, with Emily Canelo having been two-for-two in helping launch a couple successful innovative insurance operations.
In late 2019, she cast her lot a third time for the prospective role of chief legal officer and one of three founders of the completely remote Obsidian Insurance Holdings Inc.
“I was there when it was really a nascent idea that evolved into a business plan,” Canelo tells Vanguard in March. “Now we are an established company—a market leader with a solid brand. It’s been a great ride.”
When Obsidian started, there were just a few fronting carriers that didn’t represent a market sector or segment, she goes on to say. Now there are almost 25 and Obsidian’s intent on leading the pack in its support of new market needs.
Cybersecurity insurance is becoming a must, not only for businesses, but also for municipalities, banks and others. But a would-be customer has to first demonstrate an advanced level of protection against an increasingly sophisticated hacking community of threat actors.
And while still in its infancy, the cannabis industry would seem to have much potential but given the legal uncertainties, its stewards are hard-pressed to secure seed-to-sale liability coverage. Then there’s insurance for pets, for which she may have a personal interest.
“We think pets are great and we want them to be insured and live long and healthy lives,” says Canelo, whose puggle has kept her company since her two sons commenced with careers as a doctor and an entrepreneur.
Startup’s good start
Obsidian’s off and running and Canelo deems this par for the course, noting the industry experience and expertise of the founding troika of Chief Executive Officer Bill Jewett, Chief Financial and Operating Officer Craig Rappaport and, of course, herself.
Jewett had been president and Canelo executive vice president and chief counsel of the Bermuda-based insurer and reinsurer Endurance Specialty. Rappaport was the former chief operating officer for the specialty property and casualty divisions of the Hanover Insurance Group. Jewett wooed Canelo out of quasi-retirement to assist in forming his Obsidian brainchild, albeit with sparse incentives.
“At first it was, ‘Emily, please work five hours a week while this hybrid fronting carrier comes to fruition,’” she recalls with a good-natured laugh. “He said ‘keep track of your hours’ and I collected pages and pages of hours even though I’d only get paid if we launched the firm. Knowing the capabilities and relationships of Bill and Craig and being confident in what I brought to the table, there was no doubt in my mind that it would happen.”
And it did happen. Along with their investment banker, the three secured a $100 million investment from the private equity firm Genstar Capital, LLC in 2020.
In short order, Canelo helped arrange for Obsidian to buy an admitted insurance company platform from The Doctors Co. Obsidian, under Canelo’s stewardship, built out its admitted capabilities and began to add programs and people to the growing company. Obsidian began underwriting, sourcing and managing property, casualty and specialty insurance programs with a select panel of reinsurers to support the growing business.
It’s grown stronger with the 2021 acquisition of Western Home Insurance Co., which Canelo helped separate from parent Western National Mutual Insurance Co. That gave Obsidian access to nationwide admitted insurance capabilities, including the California marketplace. As for the firm’s start, Canelo never thought it was that in doubt.
“You’ve got to have a solid business plan and Bill did along with decades of experience,” she says. “The marketplace also must have a need for what you offer, and it did.”
Working from her home office in San Diego, Canelo oversees legal, regulatory compliance and human resources, and assists in claims oversight. As Obsidian grows with its expanded product lines and programs, the staff will also expand and there may be need for a full-time HR director, but for now she doesn’t seem overburdened.
A Georgetown University philosophy major who stayed in the D.C. area to graduate Antioch School of Law in 1981, Canelo says that background has been compatible. Law and philosophy inspire deductive and synthetic thinking and she’s used both in 30-plus years in the insurance business.
She started out at Guy Carpenter, a New York-based reinsurance broker subsidiary of Marsh McLennan, and then went to ZRC, which was bought by Zurich and morphed into the startup, Converium. Canelo was retained as senior vice president and legal head of transactional reinsurance from 1993 to 2002.
That was her first startup role and the second came when Endurance Services Ltd., recruited her as one of five executives to start its U.S. operation in the wake of the 9/11 terrorist attacks. She logged 13 years there with her abilities noted by Jewett, who had carved quite a reputation in finance and insurance since 1980. Retirement never seems on his radar and a few years later, he was hoping the same held true for Canelo, who had left Endurance in 2013. At the time, Canelo had been running her own firm, ReCon Advisory Services LLC, in New Jersey.
So, Canelo said, she’d be willing to devote a few hours a week to this Obsidian concept and see what ensued. That, of course, has turned into a full-time job and Canelo revved to make it three-for-three on startup success. What a different operation this is with the executive team being so far-flung geographically and the firm staking its claim among the couple dozen or so hybrids.
With much to do on all fronts, the original cast of Jewett, Rapport and Canelo has been enhanced by a workforce of around 30. Canelo’s legal team is now five and she spends around a third of her time in virtual meetings, though she’s hoping for a more personal approach this year.
“People are finding it difficult to read people,” she says. “One of my skills is looking at someone and judging how truthful they are. It’s not just what you hear but what you see.”
That said, she sees enough to shoulder a heavy load of transactional, compliance and HR responsibilities. And whatever else might come up when working remotely, save for the faces on the screen.
“Now please excuse me,” she says. “I’ve got to install my printer. This really is a roll-up-your-sleeves company.”
View this feature in the Vanguard Summer II 2023 Edition here.
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