Carriers will give capacity to MGAs with better technology

Carriers will give capacity to MGAs with better technology

Technology plays a key role in the new and growing Program Insurance and Managing General Agent (MGA) space, says Oliver Fox, Account Executive at inari. With good technology, Program Managers and MGAs can capture data, then analyse and manage exposures, enabling them to run their books better. Which is exactly what will attract the attention of carriers ready to deploy capital during a hard reinsurance market.

Last week, inari’s Oliver Fox attended The Insurer’s Program Manager conference and Awards, held in the heart of Manhattan, New York. The event hosted over 400 market professionals from the US and overseas and focused on the pressing issues in this niche sector of the non-life re/insurance industry; an area that has seen remarkable growth in the last decade, attracting capital and top talent.

Here are Oliver’s top five takeaways from the event:

Good MGAs manage risk as stewards of their carrier’s capital

One of the keynote speakers, Bob Kimmel, CEO of MGA platform K2 Insurance Services, put this pretty succinctly: “treat the carrier’s money as your own”. Without distinction or capacity, a Program Manager and MGA is nothing.  

Regulating the MGA space divides opinion

As MGA growth explodes, AM Best recently introduced new assessments to address the ability of third-party entities to perform services on behalf of an insurer or reinsurer. Some agree that performance assessments add value to the industry, while others see it as a mistake. An unnecessarily rigorous process that will distract from day-to-day operations and further growth of the sector. 

Capacity is king

The better the MGA/Program Manager, the easier it will be to get capacity. Another one of the keynote speakers, Pete Chandler, Chief Executive Officer of BMS Re, had an energetic take on the opportunities that the hard reinsurance market is presenting to the MGA/Program Manager sector. He said capacity is out there for the entrepreneurial MGAs that are abandoning ‘herd mentality’ and running towards new opportunities in what is the best pricing market we have ever seen.

Good tech will help MGAs and Program Managers to navigate a hard reinsurance market

A good MGA/Program Manager is focused on results and performance and needs to react quickly to opportunities in the market. Matthew Power, President, One80 Intermediaries, spoke of the need to be able to capture and analyse data quickly in order to adjust pricing. Those MGAs that are able to get a handle on data and analytics early on will have the edge. Carriers will give capacity to MGAs with better tech.

The word ‘MGA’ and ‘Program Manager’ is no longer a dirty word

The MGA space has come a long way in the last decade and evolved into a sophisticated market, associated with entrepreneurial talent, sustainability and longevity. In fact, Simon Hedley, CEO of Acrisure Re, said the delegated authority market is outpacing growth in the carrier sector.

Jerome Breslin, CEO and Founder at Clear Blue Insurance Group, explained the shift in dynamics. He said the program insurance sector’s reputation has changed because of a focus on quality underwriting, better tech, and top talent. He said if MGAs and Program Managers continue to push for better underwriting and claims, this market will be stable and profitable for many years to come. AmTrust Specialty Insurance’s President Dan Hickey described it as a “flight to stability and longevity”.