While COVID-19 has impacted the entire insurance sector, there are certain areas where managing general agencies are thriving even during the pandemic. IB TV recently chatted with top MGA execs about areas where MGAs remained nimble and successful despite the pandemic.
Brady Kelley, director of the Wholesale and Specialty Insurance Association, said MGAs had done well in the cyber insurance space – a sector that’s become all the more important during COVID-19.
“We’ve been talking about cyber as an emerging risk for a long time. It’s certainly not a new one – I think we’ve been dealing with it for decades now,” Kelley said. “But the basis of risk continues to evolve in the cyber space. The sophistication of hackers continues to improve, so this risk continues to evolve over time. I think that’s where we’re seeing continued growth.
“A lot of customers are more versed on the risk. They’re insuring up to make sure they’re covered, and we’re seeing that it’s a place where MGAs are stepping up. Why is that? Well, I think MGAs – any wholesale-focused expert – is bringing just that: expertise to the table. They’re working on these kinds of risks all the time, they have access to the markets that know how to underwrite them and cover them, and I think that’s a key area for this space now and moving forward.”
Steve Masnyk, managing director of the Canadian Association of Managing General Agents, told IBA that cyber was also a concern north of the border.
“Every time we build an eight-foot wall, the hackers build a nine-foot ladder – and so on, and so on, and so on,” Masnyk said. “And that will continue, like Brady said, to evolve – a nine-foot wall will be met with a 10-foot ladder.”
Masnyk said that MGAs had also thrived in the hospitality sector.
“I’ll add, in addition to cyber, hospitality – obviously, because any public-related retail small business has been impacted tremendously by government orders over the last two years,” he said. “And again, like Brady mentioned, the wholesale specialty niche underwriters … understand exactly how to underwrite those small business operations – whether it’s restaurants, hotels, motels, travel agencies, small shops. This is something where in Canada, large carriers … are unable or unwilling to get into those spaces. But the small, nimble MGAs are able to understand and properly underwrite those – even during conditions where for six months of the year or nine months of the year, they are shut down.”
