Three MGAs discuss broker relationships, HNW exits and a ‘steep learning curve’ in the professional indemnity market

With the publication date of the latest annual MGA report fast approaching, Insurance Times talks exclusively to Spring Insure, Iprism and OneAdvent about their most important lesson learnt in 2023 – and their ambitions for the next 12 months.

Insurance TimesFive Star Rating Report: MGAs 2023/24 will be published alongside its December magazine issue later this month. The digital MGA report will then be released in January, in addition to the MGA 2023 microsite.

The report is based on findings from Insurance Times’ exclusive MGA survey, which collects responses from over 1,850 brokers. Brokers rated MGA partners out of five stars based on the service they had received over the past year.

For Iprism, which achieved 4.16 stars this year, chief executive Ian Lloyd said that “2023 saw a number of shocks in the high new worth (HNW) market, with several high-profile exits amid a capacity squeeze”.

Recent ripples in the industry include Covéa deciding to end writing business in the executive motor space for HNW in January 2023 and Nationwide’s decision to limit its HNW appetite in October 2023.

“Watching this has cemented what we know – that MGAs must continue to provide excellent technical expertise, drive underwriting profit for capacity providers and provide an excellent service to brokers,” Lloyd said.

“But it has also served as a warning to the market – if some of the biggest, best-established players in the market can have the Persian rug pulled out from underneath them, it could happen to anyone.”

Considering this year’s market landscape, Lloyd said that Iprism would be “doubling-down” on its HNW ambitions in 2024 by “focusing on building strong relationships” with its capacity providers and “developing solutions to support HNW brokers and their customers”.

And financially, he said that the MGA would be “taking a sustainable approach to pricing” in addition to assessing “each risk with a laser focus”.

“We don’t know what will happen in the next twelve months but, if the previous year has taught us anything, it’s that the market is changeable and we’ll do everything we can to provide stability and consistency for our broker partners,” he added.

PI ‘foundations’

For Spring Insure, senior professional indemnity (PI) underwriter Paula McManus said a personal “steep learning curve” for her was the MGA’s launch of its PI proposition in April 2023.

And on reflection, the business “could probably have done more” to publicise its operation outside of its existing broker base.

“No matter how much research and planning you do, getting something up and running from a standing start naturally comes with a host of expected and sometimes unexpected challenges,” McManus said.

“One of the lessons has to be to put as much energy into communicating with the wider market as you do into getting the operation right, from embedding capacity through to developing new products and processes.”

With that in mind, Spring Insure said it was therefore “keen” to further promote its PI proposition to the wider broking community by engaging with them through visits and at events, including the Biba conference taking place in Manchester on 15 and 16 May next year.

“Having set the foundations for our commercial PI business, our focus for next year will be to communicate our product offerings combined with our hunt to recruit talent, attracting and developing young employees that will be decisive in our future success,” she added.

‘Ruthless decisions’

OneAdvent’s chief executive Tim Quayle, meanwhile, said the business had “spent the best part of five years trying – and failing – to explain to people exactly what OneAdvent does and what value we create”.

After distilling its purpose down last year to a “really simple plan that was easy to communicate to potential investors and stakeholders” however, it led to the business completing a management buyout (MBO) in September 2023.

“It meant we had commitment for the investment we needed from the first three conversations we had. Furthermore, simple plans are so much easier to implement,” Quayle said.

MGA platform and innovation incubator OneAdvent collaborates with underwriters and entrpreneurial startups to help develop their ideas into businesses.

In a statement released on 5 September 2023, the firm claimed the MBO was completed to boost its UK and European market presence and product offering.

“The funding raised from the MBO will be used to develop new business partnerships and capabilities and broaden the business’ ability to source and secure additional capacity for existing and new MGA and broker partners,” it added.

Now, Quayle explained the OneAdvent team “know exactly what they are trying to achieve and what their roles are” in that strategic plan – and 2024 would be about “executing” that.

“This, of course, is very relevant to the MGA industry, where companies need to clearly demonstrate in their business plans how they are going to provide value to a capacity provider – a crucial hurdle to overcome,” he added.

“Getting a business off the ground is about making fast, ruthless decisions and focusing on other areas can hinder your momentum. Having a smart and simple plan will reduce that execution risk.”