The MGA market continues to grow in a competitive and changing insurance landscape.
Guillaume Bonnissent, our Underwriting Director was interviewed by Gary Pike of Right International to find out more about a leader’s perspective of the market. You can read the full interview here.
What is attractive about the MGA market?
It’s more dynamic than the carrier market because as an underwriter, you are not limited to one particular carrier’s risk appetite or licences. There is also an entrepreneurial side and as a Specialty underwriter, you can justify more investments into your specific line of business and be remunerated for your actual underwriting performance. Moreover, if there’s been a big hurricane, the loss brought by those teams would wipe out the bonus pool, no matter how much profit your Specialty team has produced!
Why is the MGA environment different?
If you work in an MGA and only concentrate on the top line, it’s going to be a very short venture. You have to be more dynamic, you have to constantly think of new ways of differentiating yourself from the competition. You constantly need to ask yourself why brokers and prospective clients would come to you as an MGA as opposed to an insurance company. You need to be different and you need to have a unique selling point, which you don’t necessarily have to have if you work in a larger insurance company or a syndicate.
We need people who get their hands dirty
We look for people that are good at what they do and are willing to get their hands dirty! A traditional London Market underwriter can still just about get away with waiting for brokers to come to her or him with business. That doesn’t work in an MGA model as underwriters need to be able to underwrite risks adequately, which requires great analytical skills, and have excellent business development skills to be able to get the business without relying on anyone to bring it to them.
There are huge opportunities – if you can find a niche
Aside from capacity and looking at products, there are a lot of opportunities but it’s about finding the right niche. There are lots of opportunities for applying technology with automating a lot of the underwriting and using data science to ask less questions of your potential insured whilst enriching the data you use for the underwriting. It is strange to think that when investments in technology are becoming so important small businesses with less financial muscle could be better placed than larger businesses, such as insurance companies. Moreover, as I’ve already said, MGAs tend to be more dynamic and able to move quickly to ensure they stay ahead of the competition.
Can you add value?
The challenge is to make sure the MGA always adds value, not only to the clients and the brokers by providing something that uniquely matches the client needs or wants, but also provides something that the capacity providers perceive is better than what they could do themselves.
What part can technology play?
Huge! Any MGA that isn’t looking at technology – even simple things like RPA – is going to suffer going forward. Using data science and what it can bring in artificial intelligence is key. It doesn’t mean that it will make all of the underwriting process automated. Rather it will help the underwriters by enriching the data that they get and providing them with better insight into the risk they’re underwriting. MGAs need to act otherwise they are going to be left behind.
Interested in joining our team?
If you’re an experienced market practitioner, the attraction is to be able to apply your entrepreneurial spirit If you’re starting your career, the attraction is to be able to be a lot more flexible into which area you want to work in. Indeed, at White Oak, we expect everyone to get their “hands dirty” and work across several areas of the business. For instance, we expect our trainee underwriters to work closely with the Management Information team so that they understand how to analyse different accounts and the importance of collating good data. As an aside, that is why we tend to recruit undergraduates with a science degree.