To satisfy customers and capacity providers, MGAs must behave like insurers, particularly when it comes to data management and reporting.
This was the consensus that came out of SSP’s latest insurance industry event, The Evolving Insurance and Distribution Landscape, held in association with the Managing General Agents’ Association (MGAA).
The event featured presentations from three independent experts representing MGAs, brokers and insurers, each of whom agreed that the intelligent use of data and acting like an insurer were fundamental to future success for MGAs.
Reg Brown, Chairman of the MGAA, said: “This event was a great exploration of the MGA market - past, present and future, and highlighted the need for our members to be as thorough as insurers with their data management and analysis.”
Brown added: “It’s clear that the impact of stricter regulation and more demanding customers and capital providers means that MGAs must make sure they’ve got the technology in place to satisfy these demands and support a sustainable long-term business.”
Industry experts who spoke at the event included Chris Hardcastle from Gallagher London, Kevin Pallett from Aspen Risk Management, and Tom Downey from RSA.
“MGAs need to operate, behave and report like an insurer,” said Chris Hardcastle, Managing Director of Binding Authorities and Facilities for Gallagher London, when advising MGAs to embrace regulation and compliance. He added that having the data to report like an insurer was an essential part of compliance and vital to forming stable trading relationships.
Kevin Pallett, Managing Director of the MGA Aspen Risk Management, said that many providers in the insurance industry sell similar products and end up competing purely on price. Pallet added that this is the wrong model for MGAs to follow, as it favours bigger players.
Instead, Pallett said, MGAs should concentrate on doing things differently – using their data and market knowledge to identify niche markets, differentiate their products and services and meet their customers’ needs better.
This sentiment was echoed by Tom Downey, Director of MGAs and Delegated Schemes at RSA, who said how important it was for MGAs to be aware of the need to add value for the insurers who provide them with capital.
“What innovation are you bringing?” he said, adding that insurers don’t have all the answers and they are looking to MGAs to help solve their issues, with innovative use of data being the key to this.
Downey illustrated this with the example of an MGA who had provided his company with granular data enabling the insurer to see exactly which brokers and clients would be affected by the summer floods in the north east of England.
The event also included an overview of the UK insurance market from Jonathan Davey, Managing Director of Keychoice, the UK’s largest broker network. He explained that MGAs had proliferated to fill the service deficit created when large insurers closed their local branch offices in the early 2000s and pointed out that, “the UK insurance market is now more complex than it has ever been”.
Sixty delegates from 50 firms attended the event, which was held at the Brewer’s Hall in Aldermanbury Square in the heart of the City of London. The presentations were followed by a brief question and answer session and a drinks reception.