What does it take for MGAs to keep up and maintain a good commercial arrangement with their capacity provider? What part does good data management play? We interviewed major insurers to find out how they can work together with MGAs to improve profitable outcomes.
We spoke to Gary Head, Director of Schemes and Delegated Authorities at AXA Insurance and Martin McBrearty, Head of UK and Europe at Brace Underwriting to discover how important data is in maintaining profitability for MGAs and capacity providers.
At the heart of any partnership between the MGA and the capacity provider is data. It enables an objective and systematic way of looking at performance.
The use of data varies hugely between MGAs, some are on the pulse with reporting and analysis and others are trailing behind, relying on Excel spreadsheets.
Data provides the opportunity for MGAs to differentiate themselves from the rest by enabling them to demonstrate their specialisms and provide insights to make better decisions.
"Insurers are looking for MGAs to be differentiated and data is one of those key differentiators." - Martin McBrearty, Brace Underwriting.
The ultimate question is 'So what?' You can present data in all sorts of formats but ultimately, it's about the insights and the changes that can be made as a result.
Ultimately, the insurer will want to know what difference the MGA is making to the marketplace and the thinking that led to important decisions which affect the company's success.
Being clear about what each party wants to deliver and achieve by 'having a plan' to stick to is important.
It all comes down to being collaborative, insurers and MGAs have the shared goals of delivering better customer outcomes and crucially delivering a profit. Setting data-driven goals together drives the focus on continuous improvement and incremental improvements can lead to big leaps in performance.
If an MGA is able to willingly show their data to the insurer, it will help to enhance trust. By sharing their performance and the steps they are taking to steer the account into profitability will help to instil confidence in the MGA from the insurer's point of view.
The more that MGAs are able to demonstrate that they know what they're doing and they know the reasons behind changes in performance, the more they will be trusted and the more authority they will be given by the insurer.
By pulling through external data sources such as banking transactions, electoral roll information, health records and credit data, the experience can be streamlined for the customer too. It also means that the MGA doesn't have the hassle of chasing extra information from the customer as well as having the assurance that the data being used is accurate.
Data integration isn't limited to the customer experience - an MGA can overlay external data such as historical weather logs or location tracking data to see the trends and correlations of claims within a portfoilo in order to make the account profitable.
It will be essential for MGAs to keep on top of digital developments as customers make the move towards buying insurance online. The MGAs with the best digital experiences are most likely to succeed as purchases are made primarily on phones and tablets.
"The world is changing, if you don't keep up then you're going to fall behind." - Gary Head, Axa Insurance.
As noted by our capacity providers, there are vast differences between MGAs in the way that they are using data to gain a competitive edge.
We also talked to Daniel Hallmark, Head of Underwriting at Millstream Underwriting. He shared how Millstream was able to save 70% of time on data analysis and how being able to bring data in from disparate sources has really improved their performance and profitability.
You can read more about Nexus / Millstream's experience with GIROUX here.