During his morning keynote speech at the MGAA conference in London, Graham Chilton urged MGAs to call out those who are making life difficult for others
Graham Chilton, the outgoing chief executive of Gallaghers UK, has urged the Managing General Agents’ Association (MGAA) to call out the rogue MGAs.
As the morning keynote speaker at the MGAA conference in London this morning, Chilton, first of all, apologised to the audience as he had just landed from New York.
But that didn’t stop him sending out a stern warning to the association and its members.
”Whether it is from an insurer or an MGA, and form of reckless underwriting cannot be accepted,” He said.
“We really need to question what carriers are getting from their own MGAs. Because all I can see is headaches and sleepless nights.”
He then went on to stress how it is going to take efforts from all corners of the market to eradicate all rogue MGAs.
“We all have a part to play. As an industry, we need to identify and call out the worst exponents.
“It will only take a few rogues to cause tremendous customer experience detriment and that causes depressive behaviours from some of the excellent MGAs we have in this room today, who are underwriting to a far greater standard than some insurers I know.
“As someone who has been around the block, I am increasingly surprised how some underwriters in standard insurance companies, or MGAs, get given the authorisation to replicate the problems they have caused many times before.
“We have got to make sure these people are found out. It is your future.”
Dealing with compliance costs
When asked how smaller MGAs can deal with the compliance costs, Chilton said it was a tough one, but the first step was to call out the rogues again.
“It is an unfortunate part of the business that isn’t going to go away, and it is only going to increase.
“The reason why we need compliance and regulation from third parties in our business is that we are an industry who haven’t done it very well ourselves.
“Take it seriously, treat those as you’d hope to be treated yourself and call out the bad ones because they are the ones pushing up the compliance and regulatory costs of your business.”
Regulation in the MGA space
Chilton sees changes in the regulatory environment for MGAs.
“The light touch for smaller sized MGAs, I don’t see as something that will carry on.
“A lot of the attention quite rightly is aimed at the larger MGAs, but it is going to come down the pipe.”
He then explored the increasing role of MGAs working as a virtual insurer in the market.
“It’s an interesting one, and I think that is probably the way ahead.
“I.e. They should underwrite as if the capital is their own. They need to show that there is actuarial work being done, they need to understand the commitment they are making to the paper, and I would ask you on behalf of the broking community that you know your clients are going to get their claims paid because you have done the actuarial work.”