What is a good MGA model?

My short answer to the question in the headline is: expertise, systems, innovation and sales.

In my view, those four words are key to offering value to the broker, without which a managing general agent has no purpose. Too many MGAs put forward woolly differentiators such as, 'a better service than the next company', when what brokers are looking for is clear value added to their businesses through product, capacity or margins.

Possessing expertise in underwriting and claims handling means understanding your niche market in obsessive detail. Your driving force comes from highly trained, motivated people that empathise with their customers and have insider knowledge of the classes of business that they are selling; they also need to excel at crunching pricing, ratings and actuarial data as well as market-leading claim-to-settlement times.

Skilled people, in turn, need the tools to make them competitive and e-trading is the way forward. If an MGA can offer access to claims and underwriting information on a real-time basis through state-of-the-art systems then it will have something to offer that brokers really want and need.

The most successful MGAs will be those that can bring something new to the market that brokers want straightaway; innovation and insight will always be the secret to delivering market access and there is no point in either if you cannot sell the product. The growth of the business depends on the creative skills of the sales team.

There is one further feature that I would add - I call it 'hard-market play'. This is a discipline that comes with being driven by value rather than price. When the hard market comes, MGAs that sell on price will inevitably lose capacity while the 'hard-market players' will come into their own.

With good investment in expertise, technology, innovation and a strong sales team, the opportunity to stand out as an MGA has never been better.

Clive Nathan, chief executive, Towergate Underwriting.