The MGAA chief executive is optimistic about the future for MGAs and says there is an opportunity for technology companies to work with them
MGAs have performed extremely well during the Covid-19 pandemic due to their agility in adjusting business models quicker than insurers, according to Mike Keating, chief executive of the Managing General Agents’ Association (MGAA).
Speaking exclusively to Insurance Times, Keating says: “Looking outwards post-pandemic, I feel extremely confident for the future.”
This is despite the recent spate of broker consolidation, which could mean less distribution channels for MGAs to use to grow their business as there are less available brokers to partner with.
However, Keating was “pleasantly surprised” at the MGAA’s annual conference last month (September 2021) because broker consolidation was not cited as a threat for MGAs by the event’s expert panellists.
He continues: “I don’t want it to sound like everything is rosy in the garden - the challenges remain.
”But I would say it’s an ‘opportunity knocks’ [view] looking outwards post-pandemic, providing MGAs are doing what they should be doing in terms of their hygiene factors, delivering underwriting profit to their capacity partners, continuing to innovate and look after their broker distribution. Then, the world is their oyster.”
Challenges that MGAs still grapple with, according to Keating, includes capacity, being able to demonstrate value to insurer partners and differentiating available services.
MGAs meeting brokers needs
Keating highlights that brokers will choose what proprietary platform they want to position their business on. Therefore, the MGAs dealing with them will need to explore more efficient ways to manage data transfer in order to maintain these relationships.
“With the growth in technology in the MGA sector, I would be confident that this challenge would be overcome in a period of time,” Keating says.
”It’s likely that MGAs will need to adjust to meet brokers’ requirements, rather [than] brokers changing their requirements to meet the needs of MGAs.
“[Brokers] are not going to invest in multiple systems to meet the needs of MGAs and insurers. I think there’s a great opportunity for the technology companies in removing frictional costs between MGAs and brokers in terms of data and actually enhancing that journey for all stakeholders.”
Technology top priority
For Keating, therefore, ”technology is the number one message” that MGAs must consider post-pandemic.
He says: “If you look at what the next five years holds, technology is the number one message. I am sure that for all our members, if technology is not top three in their business priorities, I am pretty certain that after [the MGAA conference, it] will be.”
“[Technology has] come much more into focus in terms of its value and the need for good data has certainly been enhanced over the last two years - probably even more so since 2019, which was [the MGAA’s] last face-to-face conference,” he continues.
“There was undoubtedly a very consistent underlying key message that technology is going to be both the differentiator and adding value for MGAs as they go forward in the next four years – and that’s where the opportunity sits for our members.”
Keating adds that a primary function of the MGAA is to provide members with the tools to increase the professional standard of MGA businesses.
To this end, the association will introduce new tools and packages over the next 12 months, as well as arrange stakeholder forums - designed to aid communications and create conversations.
Lastly, Keating says there is an opportunity for lobbying as well, to highlight possible problem areas in the sector.
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