How can MGAs differentiate themselves in today's insurance market?

MGA leaders weigh in

How can MGAs differentiate themselves in today's insurance market?

Insurance News

By Mia Wallace

What does it take for a multi-line managing general agency (MGA) to differentiate itself in today’s tumultuous insurance market? On-hand to deliver their verdict in a recent interview with Insurance Business were Philippe Bara (pictured left) and Mark Palmer (pictured right) who head up Specialty MGA UK – which lives up to its name as a provider of additional capacity for specialty lines of businesses and those handling hard-to-place risks.

From their perspective, a focus on specialisms, a high premium placed on expertise and a dedicated claims and underwriting authority is what it takes to stand out in the market. Bara, who serves as class underwriter for energy, noted that Specialty MGA UK’s areas of expertise include but are not limited to energy, international property, aviation, surety and financial lines. It’s a very diverse portfolio, he said, and one which sees it provide all-line services across all non-sanctioned territories.

Specialty MGA UK on supporting its broker partners

Specialty MGA UK works closely with its chosen broker partners, added Palmer, senior underwriter for international property, and these take all shapes and forms, hailing from all around the world. As a new business, Bara said, the MGA is seeing significant appetite from its broker partners for new blood in the marketplace, particularly those able to provide swift and decisive responses.

This is especially relevant in the post-COVID period, he said, as swathes of the market do not appear to have fully recovered their responsiveness which is leading to some tension between market players. This has created an opportunity for Specialty MGA UK to differentiate itself as it’s not in the culture of the business to say ‘no’, but rather, “We will do it, but these are our terms and conditions.”

“A lot of it is price driven,” noted Palmer. “Often, we offer something different, a second event or a deductible buyback. Rather than just doing a straightforward quote-to-share business, we will offer something that maybe other people simply do not. And we will do that with a very fast turnaround. Even though we’re an MGA, we have autonomy on both the premium and the claims to make decisions here and now. That ability to make decisions ourselves is what sets us apart from a lot of the other MGAs in London.”

Backing niche and hard-to-place risks – an area of emphasis

Specialty MGA UK has been up and running for just over a year now, he said, but has come into its own since September of last year when it received Selecta backing. What’s been most rewarding to see is the positive international attention the MGA is receiving and the enthusiasm all across the London market and beyond for new capacity in the market which is willing to back niche or hard-to-place risks.

Brokers need and want the support of meaningful capacity and responsive MGA partners more than ever, Bara said, and in turn, brokers are increasingly opening themselves up to exploring new opportunities to expand and evolve their own value propositions into specialist areas.

“We’re able to create new products with the assistance of our brokers who have identified their needs,” he said. “And we will see where that goes. While we’re a new setup, we are experienced, we have some seniority in the market, and we are here for the long term. Our binder is for three years and we are currently setting up new binders to have better penetration in the market. We are also looking to have increased access to joint business.

“All these elements will allow us to have a better penetration and spread of our risk. The other thing is that as we are a newcomer, even if we have a sizeable capacity – depending on the business line we can go up to $20 million – we are not deploying this capacity just to pay our claims; we are always in a position to pay our claims. We have full claims authority, we have a claims manager and it’s very important to us that we’re always able to pay our liabilities.”

Having worked in traditional underwriting for many years, Palmer highlighted that he is well aware of the age-old insurance adage that the “premiums of the many pay for the losses of the few”. But for Specialty MGA UK, it’s more complex than that, he said, as instead the MGA has been actively underwriting to achieve the premium pool it has which means that in the event of claims, it can settle them without drawing on its backers.

How the insurance market is responding to Specialty MGA UK’s proposition

The reaction of the wider market to this proposition has been fantastic, he said – something that was thrown into sharp relief during a recent market event which saw the business book out Tower Bridge for a major market function. And while there aren’t enough hours in the day to do everything the team would like to do and growing a new business at pace is not without its challenges, he’s relishing each step of the journey.

For Bara, the key areas of focus for the year ahead are clear. It all comes down to developing the penetration of Specialty MGA UK’s proposition across the market, he said, while the business is also set to imminently become a coverholder at Lloyd’s. This will be a major proof-point of the firm’s management system and organisation, and one that will also allow its partners to connect with it further and provide the MGA with capacity while it provides them with access to new markets.  

“It’s a fantastic first year that we have now; and an even more exciting and positive journey lies ahead,” he said. “And it has all been made possible by our chairman Mr Manoj Kumar, who had the vision of first developing a brokerage – MNK Re – and now an MGA; Specialty MGA UK, with all its worldwide, cross class potential.”

What are your thoughts on this story? Feel free to share them in the comment box below.



Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!