What does the future hold for the MGA market in the UK? Speaking with Insurance Business, CEO of Pro MGA Solutions, Danny Maleary (pictured) drew on the experience of an almost 20-year career to address how he believes the space has developed and how it will continue to change in the near future.
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Traditionally, Maleary outlined, the MGA sector was “one of those markets you tended to fall into.” More recently, however, he said, it seems to be a sector you move into or that you want to grow into.
“It’s quite interesting to see how the market is slowly but extremely surely shifting around encouraging new, good young, hungry individuals to…help reshape the market and…[move it] to a more dynamic corporate type of environment,” he said.
Examining how the MGA model has evolved in the last year, Maleary stated that from a risk capital perspective there has been an embracing of the MGA as a cost-driven initiative where underwriters are looking at growth without traditional costs. Some of this, he noted is prompted by the growth of insurtech and the access of MGAs to flexible teams that are embracing technology to a degree that may not be possible in their own environment.
The MGA is, above all, a very customer-centric solution, noted Maleary: “I think you’ve seen a general desire for a much quicker, slicker, effective way to transact and actually physically suit what the customer is looking for.”
Maleary is aware of the sector changes over the last 18 months which have seen the loss of capacity within certain segments of the insurance industry. To address this, he said, there are a number of options for an MGA. The first is to ensure it has the right set-up, the right technology and the right quality of people so that, when it comes to risk capital partnerships, they can partner with individuals who are not yet well-versed in delegating their authorities in certain areas.
Also important, he said, is partnering with like-minded risk capital partners that understand an MGA and the time it may take, especially if they are a new start-up, to achieve their full potential.
Having moved from broking to this sector, and supporting MGAs both in the UK and internationally in expanding their growth capabilities, Maleary has an understanding of the broker’s perspective when it comes to MGAs.
He believes that the MGA model is increasingly accepted by insurance brokers in situations where the ultimate risk capital is reputable and financially stable. MGAs have developed as a model, Maleary said, due to their capacity to understand the clients’ needs and so they are on a similar wavelength to brokers.
Between the broker, the client and the MGA, Maleary stated there is a good balance as long as the MGA is financially stable and the broker can ensure that its client’s business is placed with an organisation that is in it for the long haul.
Brokers should look for financial strength first and foremost from an MGA, Maleary said, but also the vision of the MGA. The key areas for brokers to be mindful of, he outlined, are the quality of the product and the systems in place, and how the MGA has embraced technology.
“Embracing of regulatory processes and procedures,” is also of paramount importance, said Maleary as the entire insurance sector represents a regulatory minefield. But ultimately, it comes back once more to the customer experience and “really understanding what the customer ultimately is looking for.”
