What sets a successful MGA apart from its peers in today’s complex and competitive operating environment? That was among the questions put by Insurance Business to Pro MGA Solutions’s Danny Maleary (pictured), in a recent interview, with the CEO highlighting the importance of “flexibility of vision” in differentiating an MGA’s value proposition.
“Clarity of vision it still important, in the world that we’re in at the moment, I think being adaptable is also so important,” he said. “That’s about adaptability as individuals and as a business unit. The second piece is around the continuous enhancement of regulatory frameworks, the understanding of what it means to be a regulated person and business has to run through the veins of people and of businesses.
“The third piece is around the utilisation of technology and, in particular, data. Finally, it’s about partnerships and not being afraid to embrace key stakeholders as true partners. I think sharing vision, sharing ideas and sharing challenges is what creates the partnerships that will make an MGA successful.”
Delivering an update on the MGA operating environment as it stands today, Maleary noted that it’s an exciting time to be operating in the space. New technology is allowing the development of new physical products that can become part of the risk management suite that is aligned to a great insurance proposition and helps the risk mitigate losses in a range of areas.
Take, for example, in the flood space, he said - there’s a set of tools which can now potentially help mitigate flood damage. Even more traditional MGAs are now thinking about risk very differently, and engaging with like-minded insurer partners around product and pricing innovations to support the end insured - whether that’s directly or via the broker – to be better equipped to secure the right insurance coverages.
“So I think the sector is continuously morphing,” Maleary said. “It's becoming more and more exciting, not just in the UK, but also in Europe. We're seeing a lot of change in Europe at the moment and interestingly, we have our first MGA-specific conference being run this year in Europe by another entity. It’ll be quite interesting to see how that goes, and likewise, with other territories as well.
“There’s a lot of interest when it comes to the Middle East, with the regulator, whether it be DFSA, and also the Saudi regulator, looking to enhance and find a proposition that encourages people to come to the jurisdiction, to create an MGA platform that can serve the UAE, but also Africa and Asia. So, there’s a lot of stuff going on there, and likewise, in one or two other jurisdictions as well.”
From his perspective, Maleary said, the MGA space is still as “brilliant” as he’s ever known it to be and he believes the sector is looking forward to an exciting year. That’s not to say that there are not things the market should be mindful of going forward, particularly in certain classes where rates are now coming off and everyone's looking for growth. “My fear is that the MGA is utilised as an excuse for growth and then gets blamed for the wrong type of issues or losses. I think we’ve got to be careful of that as a sector but, generally speaking, I’m really excited about the year ahead.”
With regards to capacity, Maleary said it’s clear that capacity providers want to support MGAs, perhaps more than they have done in previous years. “We get a lot of inquiries from insurers, reinsurers and alternative risk capital looking at ways in which they can allocate their capital to MGAs and how they can utilise MGAs to give them a more diverse portfolio, to position them for growth, but in the right way.
“For me, it's about sustainable growth, not a quick win today and then a withdrawal tomorrow. There's lots of that going on and a lot of strategy and brainstorming sessions that we've been party to with insurers, who are thinking about how they grow in that structured and measured way for sustainability, rather than just for a quick win, which is quite exciting.”
