As the insurance industry undergoes a paradigm shift, the collaboration between brokers and managing general agents (MGAs) has emerged as a transformative force.
This is according to CHES Special Risk CEO and president Gary Hirst, who recently spoke of the driving factors, benefits, and considerations surrounding such partnerships.
“The insurance market's hardening, characterized by stricter underwriting and pricing, has spurred brokers to explore alternative solutions,” Hirst said, noting how capacity constraints and a decline in available contracts with conventional carriers have pushed brokers toward MGAs.
MGAs are able to offer specialized expertise and prompt responses, which are crucial for brokers dealing with the evolving demands of the insured, according to Hirst.
“MGAs display a creative appetite for underwriting, consistently developing new product applications, he said. “Prompt response time is critical in the insurance industry, and MGAs excel at providing quick responses since most insurance purchases are last-minute.”
Considering MGAs’ focus on these outcomes, Hirst also noted that broker-MGA partnerships are particularly well-suited for niche products and markets.
“Sectors like salon and spa, which involve substantial liability components, or complex construction capacities, are areas where MGAs shine,” he said. “They comprehend the intricacies of these markets and can tailor insurance solutions accordingly.”
For brokers considering collaboration with an MGA, Hirst emphasized the importance of considering a particular firm's capabilities, approach, and reputation.
“It's crucial for brokers to realize how easy it is to work with an MGA – a simple phone call or email can initiate the process,” Hirst said. “Open communication and a shared understanding of how straightforward it is to do business with their chosen MGA partner are essential. Transparency and clear expectations are the cornerstones of a successful and productive partnership.”
CHES Special Risk is part of Insurance Business Canada’s Top MGAs for 2023, receiving recognition from brokers for its pricing, technical knowledge and product expertise, ability to place niche or emerging risks, and range of products, among other criteria.
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