Opinion: Growing together, serving together

Brokers know what their customers need and the risks that they face. They know how to ask the right questions, to understand what is really important to their client and what isn’t. They know how to help customers prepare for the risks that they face, from the bleeding obvious to those that are new, emerging or coming down the track either be that because of regulatory and legal changes, climate change, changes in consumer behaviour and market trends.

Identifying the risks is one thing, however finding solutions to those risks is a very different proposition, particularly when it comes to specialist businesses, unusual or even high-risk activities that most generalist insurers would not touch with the proverbial barge pole.

And quite rightly, as they do not have the specialist market knowledge and targeted focus to be able to sort the wheat from the chaff, to respond quickly to changing risk profiles or to develop and provide new flexible solutions. But good managing general agents do.

It is no surprise that MGAs have become a major sector of the insurance market, a fact reflected in the MGAA’s own membership numbers, which have grown by more than 25% in the last year alone.”

Against this background it is no surprise that MGAs have become a major sector of the insurance market, a fact reflected in the MGAA’s own membership numbers, which have grown by more than 25% in the last year alone, along with successful expansion into the Republic of Ireland.

Hard market

The recent hard market in most lines, and the subsequent complexities and challenges posed by the pandemic have also both accelerated this trend for insurers to hand their pen to experts, providing benefits to the capacity providers, to brokers and to end customers.

During the pandemic for example, the MGA community went above and beyond to deliver unprecedented levels of service, a direct benefit of their inbuilt flexibility, specialist knowledge and, in most cases, advanced use of technology and data.

While most insurers struggled to respond quickly to the demands of the pandemic, partly due to their large size and cumbersome at best legacy systems and processes, this enabled MGAs to shine through as the nimble, fleet of foot alternative that was able to quickly respond to brokers’ enquiries, and in many cases guide end customers through claims processes.

From a regional broking perspective, this ability to respond quickly and provide direct access to underwriting decision makers, opened up new doors in terms of access to capacity, providing yet further evidence that MGAs can help brokers get access to insurance that others fail to reach.

Delivery

The development of these strong partnerships with brokers has continued post-Covid – with MGAs continuing to deliver and provide the direct access to underwriting knowledge, expertise, and decision-makers that brokers need, and that can really make a difference when sitting in front of, or on the phone to, a client.

It makes sense that brokers, who really know their stuff, should work closely with MGAs that really know theirs, in the quest to find solutions for customers whose risks and insurance needs sometimes need a bit of thinking outside of the tick-box.

A professional MGA will work with its brokers to help their customers navigate through whatever the market conditions are – including the present hard market – and by doing so, deliver the consistency in premium, coverage and service, that customers desire.

Of course, not all MGAs, or indeed all brokers, are the same and finding the right match can be challenging. As a rule, a broker should look for an MGA with a clearly identified segment or niche where they have got real underwriting expertise and skills. Their risk appetite, their products, the segment in which they see themselves as experts should also be very clearly identifiable. And of course, they should look for evidence of real underwriting expertise supported by excellent data.

Information

Data is key to a successful MGA. It drives a forensic approach to pricing for risk and the ability to segment and successfully proactively manage the fabric of their portfolios.

So, brokers that know their customers, and partner with professional MGAs will continue to thrive and grow and deliver for their customers. And those MGAs that remain focused on specialist market segments, delivering excellent service and providing access to underwriting knowledge and decision makers, that invest in their technology and data capabilities and expand their broking partnerships will also continue to thrive.

The MGA community has expanded rapidly over the last 12 months, and all the signs are that it will continue to grow and flourish over the next year. Which will provide more choice for brokers and help drive up service standards across the sector.

Mike Keating is CEO of the Managing General Agents Association