Insurance Business sat down with Phil Baker, the president of Creechurch International Underwriters, to get his take on what 2015 holds for managing general agencies.
“I think I was quoted in your magazine recently on that topic of what the future holds,” smiles Baker. “I see consolidation remaining high on that list. In terms of consolidation, we’re seeing brokers buying MGAs; we’re seeing insurers buying MGAs, and that certainly changes the dynamic. When an MGA is owned by an insurer, it ceases to be an independent entity and becomes an agent of that insurer.”
Beyond the ongoing consolidation of the MGA landscape, Baker sees syndication as one way to keeping his options open, while also opening up new business opportunities.
“The thing I’m looking more at for Creechurch is going back to syndication – spreading my insurers amongst several,” he told Insurance Business. “In the past few years – whether it is Lloyd’s or other insurers – it is key to take larger lines, and you start to lose that syndicated risk. So we’re starting to do that, and we’re finding we can secure a lot more capacity.”
And with syndication comes a greater ability to hand larger risk, Baker points out.
“We can put more capacity on the table than – in some cases – some of the larger insurers can, because they are taking a single line; whereas we have a syndicated binding authority that can handle much larger risk,” he says. “It changes the dynamic for certain MGAs – you can look at a much wider scope of business from large to small, as opposed to what MGAs have traditionally done: the small transactional business.”
