Matthew Jones, of MS Transverse, wraps up our Executive Insights coverage from TMPAA by looking at the rapid development of the specialty program market. He explains changing expectations from customers and the importance of talent.
00:01 Insurance Business TV recently attended in Scottdale the 25th annual TMPAA annual summit. Whilst there, we caught up with leading insurance professionals to address some of the top challenges the industry is facing today.
00:17 I'm here with Matthew Jones, head of business development and Transverance Ventures as MS Transfer.
00:26 The specialty program market is evolving rapidly with curries, MGA's gravitating towards hyper niche verticals. What are some of the underlining market forces pushing this trend towards such specialized programs?
00:40 So I think what we're observing here is probably a return to the roots of the MGA market. If you think about when the NGA market began many years ago, it was driven by very experienced qualified experts in given segments or subsegments leaving a traditional carrier establishing their own business and developing a reputation for a special level of expertise in that given space.
01:04 And so that is probably a good example of what we're seeing again. Now, there's been a big shift of what we might consider more mainstream business moving to the MGA market over the last few years. And believe me, I think that's not going to change. That's going to continue.
01:23 But I think what's really driving a lot of what's happening at the moment is actually technology. The first is that technology is enabling access to segments that weren't previously accessible a number of years ago.
01:38 Then the second thing is that there is this proliferation of data out there that previously wasn't available that can now be taken into account and factored in when it comes to underwriting that niche.
01:47 And so that combination of a segment being available and then a segment being underwritable is driving this rejuvenation of interest in niche segments.
02:01 Right. Thank you. So I wonder if we talk about market fragmentation and certainly in underserved risk classes. Are you seeing these expectations changing and the demand for more tailored solutions?
02:14 I don't think it's really about expectations changing necessarily, but I do think that it's about expectations increasing. Ultimately, the insured is the one that pays the premium and it's the responsibility of the insurance market to respond to how those expectations might be developing over time.
02:30 But I certainly see that there are a couple of things that are becoming more and more important to the insured. The first is that the insured wants to know that when they're engaging with their insurance provider they're dealing with a genuine expert in that particular space.
02:46 They also want to be able to access coverage really quickly, and if you're going to do that responsibly in the insurance market, you have to be dealing with experts.
02:55 But they also want to know that at the point of a claim, they're dealing with someone that's not just got the technical ability to evaluate the claim and adjudicate and make a decision about it.
03:07 I think they often want to know that they're dealing with someone that's got a deeper appreciation for that segment, potentially has more of an emotional understanding of that kind of customer, that individual or business.
03:22 But at the end of the day, someone who's going to take that claim and put it into the context of that niche, that's what's becoming more and more important to people.
03:27 Right. Thank you. Many conversations I have are talking about how people within our industry are becoming more and more important. It's getting more complex and, as you're saying, the real deep understanding of these niche markets so they can understand and explain those challenges to their clients.
03:44 Yeah, that's absolutely right. So from our perspective, it's the combination of not just the individual but the individual with technology.
03:52 One of the steps that we took at MS Transverse last year was to combine our partnerships group with our venture investing activities.
03:59 So when we are deploying capital on the investment side, it gives us a better understanding of what's happening when it comes to technology and we take those learnings and insights and apply them to our evaluation of an MGA that might be targeting a particular niche.
04:15 Right. Thank you Matthew. Thank you for speaking with me Insurance Business.
04:20 Thank you very much. Thank you.
