Adaptable MGAs can beat insurtechs at their own game

Our Chief Executive Officer, John Shepherd wrote an article for Insurance Day on the MGA market. Some of the main points are below and you can read the full article here.

To paraphrase Charles Darwin, it is not the strongest that survives, it is those that are most adaptable to change. In nearly a decade leading White Oak, I believe this has never been truer for MGAs than it is right now, especially with the influx of third-party capital in the market.

Disruption could help MGAs

Disruption is everywhere, be it Airbnb in the hotel market, Uber challenging taxis or Amazon in, well pretty much everything. If recent press reports are correct, then Amazon’s arrival in the insurance world is imminent.

Add to this other disrupters, many supported by venture capital, particularly Insurtech firms and the need to adapt and react quickly is imperative. A fact brought home to me when I read that insurance start up Lemonade paid a claim in 3 seconds, with no paperwork involved.

MGAs play a fundamental role in the insurance chain:

  • The MGA market is not only growing but outpacing the property and casualty market. Premium growth is 7% higher than last year compared to only 5% in property and casualty. In addition, a majority of the top property and casualty insurers have relationships with MGAs – so there is clearly a value and carriers see this.
  • There are more than 300 MGAs underwriting over 10% of the UK’s £47 billion general insurance market. For MGAs to remain relevant to carriers we need to we need to add value.

Breaking the chain

The flexibility of the MGA model means that we should be prepared to embrace the latest technology. For example, at White Oak, we are upgrading our online underwriting platform for business that would otherwise not find its way to London because it would be too small to be considered. A producer in the USA can get a quick quote within 5 minutes, 24/7 and if they like what they see, policy issue within 48 hours. This is supported by an existing claims system which means they have the ability to pay authorised claims immediately, locally.

How to survive

If you believe Darwin was right, being the strongest will not be the key to survival, but your ability to adapt to change most certainly will. At White Oak, we relish the future and the challenges it will no doubt bring.

2019-02-18T15:55:21+00:00 15th February, 2019|Insights|