MGAs are constantly looking for capacity with carriers, and companies such as Stere are providing innovative digital platforms that are taking the burden of legacy processes and simplifying how to facilitate new business.
Speed to market is vital for MGAs and embracing new automated technology allows organizations to match with carriers, improving the overall insurance-buying experience.
Stere was launched in May 2021 by program insurance professionals, signing on 23 MGAs in six weeks who generate over $900 million in premiums through their programs.
It is a digital ecosystem that unites carriers, reinsurers, and other risk capacity providers with reinsurance brokers, MGAs, program administrators, and embedded insurance platforms. The Stere ecosystem also encompasses underwriting, claims, policy administration, and other technology-driven service providers.
“We found very quickly, particularly with the MGA space, that most programs are differentiated because they focus on niche or specialized underwriting and products,” Dogan Kaleli, CEO of Stere told Insurance Business. “We like bringing MGAs into the space because of the product differentiation, and we create a growth opportunity for the MGAs because they are matched with additional distribution channels.”
Adapting to digital models such as Stere allows MGAs to say ‘goodbye’ to manual processes that take up valuable time - but Rick Wiseley, head of business development at Stere, stated that easing MGAs into adopting an automated approach is still an obstacle.
“The number of emails and attachments to bring on a program was historically astronomical,” said Wiseley. “We allow all emails and the exchange of data to be facilitated on one platform with easy accessibility and we educate on how to navigate digital processes.
“Since there has historically been redundancies and slow turn around, our approach to a digitized process really does reduce the manual effort and speed in the long run which leads to more success in placements.”
“We are an ecosystem for insurance programs and have three buckets of stakeholders,” said Kaleli. “We offer the technology that connects MGAs to the partners they need such as policy administration systems, data analytics for underwriting, and insurtechs to set up and automate financial reporting.
“We’re creating this one stop shop for insurance programs - especially MGAs - to help them find whatever digital tools they need to enhance their business.”
Stere has onboarded solution partners so MGAs do not have to go vendor to vendor and can focus on growth and underwriting. Providing that ease of business throughout the platform allows MGAs to customize what suits them best.
“We started to white label and filter those deals according to a carrier’s appetite for a well-rounded, customizable approach to insurance,” said Kaleli.
“When an MGA looks for capacity, they go to all the contacts they know, and talk to as many carriers as possible without any initial filtering,” he added. “When we onboard a carrier or reinsurance company, we ask questions to understand their program strategy and match that appetite.”
Both Kaleli and Wisely have years of experience underwriting on the carrier side and noted that the process for an MGA to find capacity is a minimum of six months - and after dealing with launching the program, the process can be stretched out to nine- to 12 months.
“Stere is trying to provide a crisp narrative and observation of loss ratios and we do that through our application to help them present themselves better in the marketplace,” said Wiseley.
“We focus on taking automation as far as we can,” Kaleli emphasized. “If we can come in and digitize the placement process, from the basic implementation of e-signatures to digesting when the MGA uploads their raw data on premiums and claims, carriers, underwriters, and actuaries don’t have to spend time on the administration side, which can cut 50% of manual work.”
“Insurance is a relationship business and it’s going to remain that way - but building the relationship between MGAs and the carriers can still be data driven,” Kaleli said.