Rob Tolley London - The Role of Managing General Agents

MGAs are managing general agents, and they fulfil a vital role within the insurance supply chain. As insurance agencies, MGAs provide underwriting services on behalf of an insurer or syndicate, and the work they undertake typically includes rating, issuing documentation and claim handling. MGAs effectively enable insurers to access markets where the £5,000 plus minimum premiums would be otherwise prohibitive.

1. ROB TOLLEY
LONDON
CEO and Co-Founder of Global Specialty Underwriters
The Role of MGAs

2. The Role of MGAs
MGAsaremanaginggeneralagents,andtheyfulfilavitalrolewithintheinsurance
supplychain.Asinsuranceagencies,MGAsprovideunderwritingservicesonbehalfofan
insurerorsyndicate,andtheworktheyundertaketypicallyincludesrating,issuing
documentationandclaimhandling.MGAseffectivelyenableinsurerstoaccessmarkets
wherethe£5,000plusminimumpremiumswouldbeotherwiseprohibitive.
ReinsuranceandMGAs
DuetothevariednatureofrisksandcoverageoptionsthatMGAshandle,reinsuranceis
asignificantelementofmostMGAs’business.Reinsuranceoffersindemnificationand
theopportunityforreimbursementinrelationtopaymentsalreadymadeandcan
thereforeplayanimportantpartinstrategiestominimiseriskandmaximisevalue.
MGAsworkdirectlyandindirectlywithreinsurers.Intheformercase,thisinvolves
developingprogrammeswhere,forexample,anexistingnichehasbeenidentifiedinthe
market.

3. The Role of MGAs
TheRoleofMGAswithintheValueChain
MGAscanplayasignificantrolewithinthevaluechain,positionedastheyoftenare
betweenotherintermediaries.Assuch,theyhavethepotentialtoofferauniquevalue
propositiontoeachofthepartiesinvolved–forexample,awholesalebrokerandan
insurancecompany.
MGACEOslikeRobTolley(formerLondonbroker)understandthatMGAscanenhance
theefficiencyofthevaluechainastheytendtooperatewithoutthelegacyplacement
platformsthataretypicallydeployedelsewhereinthesector.Furthermore,mostMGAs
areyoungerandsmallerthaninsurancecarriers;beingleaner,they’rethereforenot
boggeddownbytheoperationalcomplexitiesthatcouldotherwiseslowthemdown.

4. The Role of MGAs
NewlyEmergingRisks
ThespecialistunderwritingskillsandmarketexperiencethatMGAscanbringtobear
regardingnewlyemergingthreats,suchasthoserelatedtocasinosonNativeAmerican
reservations,cyberthreatsandtransactionalliability,aremakingtheirservices
increasinglyindemand.AnumberofMGAsfocusedoncyberthreatshavealready
emerged,andMGAsarebecomingmoreandmoreactiveinthespecialtycoveragein
personallinesfield.
Duetothesefactors,bothunderwritingqualityandcustomerexperienceareseeinga
boost,andtherehasbeenageneralwideningofaccesstospecialisedrisksforMGAs’
capacitybackers.
TheIncreaseinDigitalMGAs
TherehasbeenariseindigitalMGAsinrecentyears,whichtypicallytargetspecificend
customerstoprovidecertainlinesofinsurance,suchashomeowners,pet,autoand
small-commercial.ManyMGAsarealsonowretainingaproportionofriskontheirown
balancesheets,allowingthemtomaintaincontroloversomeofthecapacitytheyplace.