Why are insurers allowing brokers to move into their space in the value chain?
Everyone’s doing it. Cast your mind back 18 months, and a band of angry insurers, led by NU boss Igal Mayer and AXA’s Philippe Maso, were saying, loudly, that the MGA model had had its day. Mayer’s long gone. Maso, to be fair, is still here and still saying it – but he’s pretty much alone.
In the meantime, countless MGAs have sprung up, rebadged, rebranded and expanded. As we report this week, Jonathan Davey has set one up on behalf of technology provider SSP. Then there’s Chris Giles’ Ink – with its purchase of network Westinsure, it seems to be the only part of the consolidator buying right now. JLT is pressing ahead with growth plans for Thistle, Lockton is setting up its own MGA, Oval’s got one … the list goes on.
All this prompts a couple of questions. First, how can this new breed of MGAs differentiate itself from successful predecessors such as, say, Towergate Underwriting? And second, why are insurers allowing an increasing number of brokers – or other players – to move into their space in the value chain? Is it habit, inertia, an admission of inadequacy, or simply a smart way of gaining extra distribution for a low outlay?
Any way you look it, one thing is clear: rumours of the MGA’s demise have been greatly exaggerated. IT