MGAs: brokers love you, but…

The Insurance Business survey on rating MGAs has produced one consistent response from brokers: they love and appreciate what you do. But there are a few things you could be doing better.

Risk Management News

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The Insurance Business survey on rating MGAs has produced one consistent response from brokers:  they love and appreciate what you do. But there are a few things you could be doing better.

“MGAs play an important role in the broker world and need our support,” says Paul Topp, a marketing manager with Programmed Insurance Brokers Inc. in British Columbia. “With more and more consolidation in the marketplace, you are getting underwriting that only wants milk toast, white bread and predictable policies.”

Topp told Insurance Business that he uses MGAs for E&O, D&O and non-standard and substandard properties, appreciating that not many ‘normal’ underwriters are able to “think outside the box.”

And he is quick to point out that he won’t deal with an MGA that takes too long or simply doesn’t respond to a request for underwriting.

“The ones that want to grow, they are the most eager in turnaround times,” he says. “I stop dealing with the ones who aren’t.”

Brokers have describing MGAs as “lifesavers” and “an important part of the industry.” One Alberta broker agrees, saying that her brokerage uses a lot of MGAs and finds them to be on price point – but feels there needs to be a greater sense of urgency on the underwriting.

“We find that MGAs carry a lot of the same markets. Their claims service tends to be lacking and limited,” says Kathy Braybrook, a broker with Brokerlink. “They are smaller than a domestic and this can inhibit their turn-around time, when dealing with a rush this could cause an issue. Most MGAs are receptive however to working with us on providing coverage that we require and just charging for it; which is what should be done.”

A characteristic appreciated by many brokers is the flexibility and accommodation shown by MGAs on coverage and underwriting.

“I find, being strictly a commercial producer, that more and more of my business is given to MGAs due to the Standard Markets’ inability to understand out-of-the-box risks and coverage requirements,” says one Ontario broker, who asked to remain anonymous. “I appreciate my relationship with MGAs. I would like to see a speedier certificate of insurance issuing, as this may take up to a week for a MGA to produce when the client needs the certificate now.”

How do you rate your MGAs?  You tell us and take the survey, and have a chance to win an iPad mini.

 

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