There are a number of aspects needed for a truly effective MGA-carrier relationship – and Rekha Skantharaja (pictured), president & CEO at Tangram Insurance, has pinpointed some of the most important.
“Front end due diligence is vital,” she revealed. “Before entering the relationship, both parties must do their homework on each other. Then there’s clarity of vision. Both companies must have a vision and be able to articulate where they are today and where they are headed tomorrow. Conversely, both MGA and carrier must understand if their visions are in conflict with one another.
“Transparency matters too. Talk about your honest expectations of each other in the relationship. What are your deal breakers and what are your points of negotiation? What are your strengths and points of development?”
“You also both need to define success: how will you know if the partnership is working? What are the mile markers? How will they change over time? And this blends into accountability. Both parties must have responsibility over the success of the relationship. Constant self-awareness and communication is critical when either the MGA or carrier is falling short or needing help. You can’t identify areas of development and make progress, if people aren’t honest about their gaps and required support.”
A fruitful MGA-carrier partnership can benefit retail agents in a number of ways, Skantharaja added, including “access to specialized programs with unique coverage and services, front line decision makers who can quickly assess opportunities” and allowing retail agents to “have impact over the direction and evolution of the program.”
While these are all hugely valuable tips in the relationship –- what does Skantharaja think MGAs should be looking for when sourcing a carrier partner?
“Financial stability and longevity in the marketplace is the price of entry,” she explained. “After all, you need the carrier to be there in the long term to pay claims. In terms of expertise, do they hold the necessary skill set to support your company’s underwriting? The carrier shouldn’t be redundant, but they should be additive.
“You should also determine where they are in their technology journey and whether it is symbiotic with yours. When it comes to innovation, are they willing to think big, think creatively, think differently?
“Not all carriers are created equal. Many don’t have the right perspective, understanding and infrastructure to allow MGAs the room to take advantage of opportunities, or truly provide support to weather inevitable difficulties. Analyzing their track record in the program space is an important data point.”
And what about the flipside of things? What exactly should MGAs bring to the table in this relationship, especially considering today’s fast developing risk landscape?
“Demonstrated expertise in underwriting is queen, everything starts there,” Skantharaja said. “There are carriers who want to penetrate a specific industry, coverage or line of business. As a risk bearing entity, it’s imperative that you bring a keen understanding around risk selection for that specific segment or line of business.
“You also need agility. MGAs can move faster than carriers, quickly pivoting on distribution, leveraging technology, and recovering from failure faster than insurance companies, who contend with much bigger infrastructures and investments.
“Then there’s efficient distribution. If you’ve been doing this long enough, you understand distribution is one of the hardest elements to build and scale. It is time consuming and expensive. When a carrier contracts with an MGA, they have one producer as opposed to thousands.
“Finally, don’t forget speed to market. Partnering with an MGA can be the quickest and most effective way for a carrier to enter a space. MGAs with experience already understand the market landscape and necessary value proposition around product and pricing. It can take months or years for a carrier to get up to speed and, by then, the opportunity may have passed.”
By taking all of this into account, Tangram has been a stand-out in the MGA space, with over two decades of scaling programs profitably, building specialized distribution and partnering with growth-oriented carriers.
Tangram is also proudly progressive, driving forward with a diverse, multi-generational team, female CEO, and 100% female executive team.
“We are an independent, entrepreneurial firm without hierarchy and bureaucracy,” explained Skantharaja. “In a world where the big companies are getting bigger, people want access to decision makers. They want action on ideas. They want rich culture, not rigid corporations. Tangram has a distinct advantage as one of the few sizable MGAs to remain independent, allowing us to create our own destiny on our own terms.”
