The HDI Global Specialty Survey, containing qualitative and qualitative questions, provided a wealth of data regarding MGA service and operational requirements, how data is acquired and utilised, claims administration practices and future business challenges.
The dominant business challenge reported by our MGAs stemmed from the constant threat of market competition. Competition from insurers, existing and newly formed MGAs, broker distribution channels, developing technologies and changing customer demands. In the UK, the growing membership of the Managing General Agents’ Association is evidence of the continuing attractiveness of the MGA underwriting model. This unrelenting competitive marketplace is a real driver for MGAs, compelling them toward continual improvement - despite often limited resources – and helps explains why the MGA sector is such a dynamic and innovative one.
The second key business challenge was one central l to the whole MGA business model - capacity availability and utilisation. This was followed by the need to continually understand and address a changing regulatory climate and its associated costs.
Increasing claims costs and claims administration charges were ranked as the fourth main concern., The impact of Covid-19 was only ranked as fifth, perhaps underling the resilience of MGA operational structures and agility of working practices. It was interesting to note that MGAs assessed underwriting profitability and the need to apply new technologies toward the bottom end of their numerous business challenges, an indication of confidence in their skills and experience necessary to successfully underwrite risk and operate appropriate technologies.