Canadian managing general agents (MGAs) are juggling challenges and opportunities alike amid hard market conditions in commercial lines, with carriers shedding some lines of business to cope with the strain on their bottom lines.
These are gaps that MGAs can often address with their niche expertise and creative solutions. However, one issue that must be addressed is the pricing - a particular pain point for customers, according to Rupinder Hayer (pictured), president of Armour Insurance Brokers.
“I think MGAs and brokers face similar challenges in the market today. With rate increases from insurance companies, clients have become very price sensitive. The cost-of-living is also going up, which means more clients are shopping around,” Hayer told Insurance Business.
“It has also been challenging to coordinate after transitioning into hybrid working. Turnaround times are slower. Sometimes we call underwriters only to get their voicemail,” he continued.
Armour Insurance Brokers is presenting the MGA of the Year award at the Insurance Business Canada Awards (IBCAs) ceremony in Toronto on November 17. Here, Hayer breaks down the qualities that Canadian MGAs need to be truly exceptional:
“It’s all about how quickly they can respond, and how clear their communication is with brokers,” said Hayer. Brokers and MGAs are both under pressure to deliver ease of doing business to customers. Underwriting responsiveness and turnaround time can separate the five-star MGAs from the rest of the pack.
Hayer also believes client submissions processes should be streamlined. “Everybody is running short of time. The clients don’t have time to give answers for 30 questions. They want the application process to be quicker,” explained Hayer.
Insurance products and risk appetite are in constant flux. With the dynamic movements in the market, MGAs should be constantly communicating with their broker partners about their offerings. Being agile to respond to the needs of the market is also key.
Hayer said: “What is their real appetite? Because MGAs are backed by insurance companies, their products keep changing. One year you’ll see an MGA underwriting certain things, the next they don’t because the insurance company backing them has changed its appetite.”
“At the same time, if underwriters are approachable, their staff give us knowledge about their new product and changes in their appetites, and brokers can have personal interactions with their business development teams, I think that’s what makes an MGA better,” Hayer told Insurance Business.
Many if not most MGAs are upgrading their tools to keep up with the industry’s digital transformation. But they should also nurture their personal touchpoints to maintain the connections they have with brokers and clients.
“Human interface will always be one of the key aspects of doing business with MGAs,” Hayer stressed. Digital capabilities will save time when you are submitting a claim or learning about new products, but personal relationships between brokers and their MGAs will still be paramount to each other’s success.
“There are many things that we need to consult with underwriters about. Technology can help - but in insurance, I think a human voice will always be important,” he concluded.
For the brokerage leader, presenting the MGA of the Year honour at this year’s IBCAs is their way of showing appreciation for the sector. “We always care for insurance companies as our main partners, but being a commercial broker, I think our business won’t be complete with the support of an MGA,” Hayer commented.
“MGAs can improvise and customize packages, look for gaps in the market, and bring solutions. We need MGAs to supplement our main business with standard insurance companies.”
Swift turnaround time, communication and product knowledge help MGAs create meaningful, long-term partnerships with brokers. Hayer continued: “Without an MGA, I don’t think any commercial business can be written. We’re making an effort to recognize what they’re doing, especially in this hard market.”
The 2022 Insurance Business Canada Awards ceremony will be held on November 17 at the Liberty Grand in Toronto. Hosted by Big Brother Canada’s Arisa Cox, the in-person event will recognize the excellence of brokers, brokerages, insurers, underwriters, MGAs, and risk managers across the country.
Join us for a night of celebrating the crème of Canada’s insurance crop! To reserve a table, please visit ibawards.ca/register.
