Briefing: MGAs shine in broker survey…but a big concern remains

By Content Director Saxon East

Once again, MGAs have shined.

That is the key take away from this year’s Insurance Times MGA survey, released today (15 September 2021), in which more than 1,000 brokers took part. 

Six MGAs were awarded top marks. 

Brokers gave feedback on 38 MGAs. Most received above three stars on service - and there were plenty of four and five star accolades awarded.

Brokers generally felt that MGAs had provided a good, responsive service during the Covid-19 pandemic. 

For example, 54% of brokers said MGAs had been “good” at adapting to customer needs with products and policies. 

Areas for concern 

The survey also revealed areas of concern. 

The IT solutions MGAs offer to brokers - whether it be an extranet or Acturis - needs further development. 

However, the big issue remains capacity. 

Around 30% of brokers said they were “very” concerned about MGA capacity, compared to 30% who are “moderately” concerned.

Digging into the comments, here are some of brokers’ main concerns: 

• Certain sections of the market, such as directors and professional indemnity, are too reliant on a handful of big players. 
• MGAs changing providers every couple of years.
• Capacity providers fuelling MGAs with cheap rates that are unsustainable.
• Insurers looking to clean out their books to improve underwriting could easily cut MGAs.
• Lloyd’s, once a major backer, is now viewed with nervousness, with fear they will pull the plug on provision. 

There is a general nervousness, especially around a few big players - although we will not single them out.

Capacity is causing some players to get a bad reputation. 

This is forcing brokers to look elsewhere. 

Despite being a difficult issue, it is also an opportunity. Those MGAs with a solid track record of backing from A-rated paper, with stable providers, can be more aggressive in communicating and marketing it to brokers. 

MGAs generally do a pretty poor job of playing up their capacity provision strength.

So, in summary, MGAs continue to provide an important service to brokers. They deserve their good reputation. 

And if we didn’t know it already, capacity is king.