Managing general agencies (MGAs) are going through a significant transition right now. Technology and the changing workforce have impacted the insurance market broadly, and MGAs are not immune to the disruption.
Standing by as the insurance industry moves forward isn’t an option for agencies and underwriters that want to maintain both growth in their bottom lines and meaningful value propositions for brokers and carriers.
“By virtue, MGUs and MGAs, program administrators, are the middlemen,” said Rekha Schipper, president of Tangram Insurance Services. “How can we make sure we stay ahead, make sure that we take advantage, and make sure that we continue to be relevant and meaningful to a broker, to a carrier, to a tech investor, to say, this entity still belongs in the middle of all of this?”
Investing money in thought leadership, learning how carriers collect and store data, and making a real effort to talk to brokers about the tools they need are just a few of the ways some MGUs are figuring out their new place today and safeguarding their roles for the future.
The average broker especially has a lot of useful knowledge to offer. If an MGU can help them reduce costs or make their deliverables look more sophisticated, they can build a strong interdependence that will last.
“We fall in the trap sometimes of only managing our larger agents and I think, as an MGU, you have to get religious around understanding how to manage any agent, whether they place $100,000 of business with you or $1 million of business with you,” said Schipper.
As for tech, insurers are adopting new ways of doing an old business, though that adoption hasn’t been as fast as in other industries.
“In the last year or two, we’ve all realized there’s been a shift and acknowledgment by the technology community that there is a reason why insurance hasn’t changed as rapidly over 100 years and there are things that are embedded in it that make it unique,” said Schipper.
Yet an MGU is the most natural outlet for technology to plug into. Established distribution channels and the thousands of brokers at an MGU’s fingerprints have caught the attention of tech companies who can make an MGU’s work more efficient.
“We can bring programs to the market faster. We can get out to more brokers because they can get on our platform. We can reduce our expenses as an MGU because now we’re automating a lot of things,” explained Schipper, adding that there’s “an unprecedented opportunity” for partnerships between technology vendors and MGUs.
As for a workforce that looks different than it did 30 years ago, Tangram leads by example. About 80% of its employees are millennials and the organization is 75% female, with a majority of the executive team being comprised of women.
It’s not by accident – these numbers are the result of intentional, and necessary, hiring.
“The biggest thing we can do to pull our MGU forward, and look like the MGU of the future, is start to cultivate it at the bottom levels, so in three, five, 10 years there is a dynamic pool of younger people who started out in their 20s, who are well-educated, well-versed in insurance,” said Schipper.
It’s clear that MGAs need to tap into changes in the market today, as an evolution of the industry slowly picks up steam, if they’re going to thrive decades down the line.
“The MGU of the future needs to be able to catch the ball wherever it’s passed to you on the field, whether it’s the 50-yard line, the 20-yard line or the end zone,” said Schipper. “Historically, we’ve always been passed the ball near the end zone.”