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Richard Salmon

Richard Salmon

Change is said to be the only constant, and it never ceases to surprise me how the same can be said of the market in which we work. It is only five years ago, when resigning from my company market claims position, a former colleague commented, rhetorically, “you are leaving to join….an M…G…A?”. I was not sure if they knew what a Managing General Agency was, but fast forward a few years, and there can no longer be any doubt concerning a) people’s improved understanding of an MGA proposition and b) that it is a successful business model that is here to stay, working well for policyholders, brokers and carriers.


Expertise, distribution, innovation and economies of scale all combine for the MGA to produce an offering which has become more and more popular with time. However, there are always challenges. Recently, the significant hardening of the market has resulted in many Lloyd’s Syndicates, Companies and others withdrawing from writing certain lines of business. Ironically, the increases in premium – while improving revenue, and some would say demonstrating a better reflection of the risk to be carried – have meant carriers and MGAs alike are hitting their capacity limits much quicker than expected. For London, this is a concern, as we wish to remain the market of choice for our domestic and international policyholders and brokers alike when it comes to their insurance needs. However, if I have learnt anything, it is the cyclical nature of the market, and this problem will likely be temporary as new entrants arrive and new solutions are created.


Talking of insurance coverage leads me to my specialty subject, claims. The way in which claims are transacted continues, rightly, to be on the agenda – particularly relevant for those working within the MGA world. Claims are often said to be the shop window of the insurance profession, with clients and customers seeking financial comfort that they will be indemnified should they suffer a loss. While many MGAs have historically either been a post-box to carriers’ claims departments, or alternatively outsourced their claims operations in whole or in part, many are now insourcing, setting up their own, exclusive, internal claims teams to handle most if not all of the claims that arise from the business it produces. These teams do not just include claims adjusters, they now include specific claims MI analytical support, claims/finance processing technicians, claim business development executives (in terms of seeking new claims opportunities and contracts) and other types of experts, depending on the line of business.


Establishment of a claims team is never easy, as it does require significant investment, not just in people (and having a operational team framework in place) but also in having the supporting technology, which we all increasingly rely upon. It also requires confidence from capacity providers in the form of the team being qualified and credible, having sufficient loss funds, plus delegated authority, for the MGA to be empowered in making relevant and timely claims decisions. However, working directly with the underwriters as well as working collegiately with other internal departments such as compliance, marketing, finance, projects and IT, means this specific claims offering can be well placed to offer good value claims service. Similarly, underwriters are able to offer expertise, innovation and access to distribution channels: locally, regionally, and internationally, that would not ordinarily be accessible for others.


This claims proposition is further enhanced when the team is motivated, engaged and above all committed to providing a great claims service. This is often underpinned by having excellent teamwork, as well as having a good CPD educational program in place, so people have the platform and support to learn new applicable information and skills together, to help people develop professionally, as well as encouragement and support for individual study. The Chartered Insurance Institute and its programs remain the qualification(s) of choice and relevance for our market.


Throughout my claim career I have been fortunate to work, directly and indirectly, with some excellent colleagues, adjusters, managers and claim directors, as well as various types of service providers, who also contribute to the claims process and good outcome. People, in my opinion, remain the most valuable asset of a team, and this is no different when it comes to the world of claims and M…G…As.