Insurance Software to Leverage the Performance of MGA Managers

Previously, we have talked about the advantages that insurance software provides for underwritersThis article will focus on the main bottlenecks in MGA Managers’ responsibilities and how they can benefit from using insurance software. 

The Biggest Challenges Faced by MGA Managers 

Building an insurance company is a major challenge by itself. The decision to take the MGA route is usually for one or more of the following reasons: 

  • limiting capital requirements associated with setting up an Insurer; 
  • earning a better margin; 
  • designing and creating your own product to meet unique market needs. 

The biggest challenges that MGA Managers face largely depend on the state of the company and the phase of the growth it is experiencing. Each life cycle phase has its concerns: while existing players focus on market growth and securing their position, new MGAs usually set the sky as the limit and try to find ways to take as much market as possible from the incumbents.  

Of course, MGA Managers must deal with the challenge of which investments to put into technology. Although they have the permission to decide, they are still somewhat locked to insurers who set the rules of the game.  

Distribution is another complex challenge. Having your product available on your system alone is not enough to meet revenue goals. For example, circa 40% of SME products are distributed via traditional software house systems. MGA Managers must consider whether they need to build products onto legacy systems in order to make their proposition available to the distribution network.  

Steve Tunstall's QuoteIf MGA Managers were unfortunate enough to begin setting up their business as the pandemic hit, their priority has to be securing capacity 

Anna Marie Powell's quote

MGA Managers can also face challenges getting FCA authorisation for their business model. They must pay attention to hidden costs when setting up an MGA, especially the leaders entering the insurance world.  

Whilst insurance is quite a segmented business, it is also crucial for MGA Managers to fine-tune their offering to find the elevator to success.  

Steve Tunstall's Quote

The insurance market has not stayed untouched by Covid. The pandemic especially impacts the intermediaries serving micro SMEs, as this market often comes with a higher risk and customer acquisition costs. The main issue for MGA Managers is manual processing time for micro SME and freelancer data, which starts affecting profits even before the additional time of sourcing adequate cover or communication delays are considered. This is why MGA Managers who serve micro SMEs are in a tight position.  

Insurance Software to the Rescue 

Technology has been the key in enabling MGAs to work remotely. If MGA Managers can embed technologies such as artificial intelligence (AI) and machine learning (ML) in business administration, they can reduce overall operating costs and manual processing time thanks to increased automation 

Emerging technologies provide MGA Managers the opportunity to enhance customer experience and move out of the hard market. Customers are looking for a smooth, quick, accurate, and cost-effective user experience, which technology can help to provide alongside long-term customer retention and satisfaction. 

Janthana's Quote

The key for an MGA Manager is to think about the front office and how to make buying insurance easy for customers. Back office is nonetheless important, since it has to communicate with Insurers. Having your own insurance software in place gives an advantage to MGAs to build their business and adapt, whereas those MGAs who fully depend on Insurers’ systems, are less favoured.  

Janthana's Quote

The Biggest Opportunities Insurance Software Can Provide to MGA Managers     

What are the main opportunities insurance software can provide to MGA Managers? For starters, it is not just about policy administration and creating simple policy documentation. Insurance software can provide MGA Managers the ability to build a seamless customer or broker entry point that links the whole customer journey.  

The pandemic has clearly proven how important technology is for serving customers and seamless business operations. Cloud technologies have enabled quick data access and storage, but technology such as AI, ML, and automation can enhance data usage and sharing abilities even more, streamlining customer service. 

Janthana's Quote

Data is king to underwriting and pricing, but it can also be utilised to improve service quality. Insurance software can provide the capability to send and take in data using APIs from external sources and apply that to rules in the system. APIs can be used to streamline MGAs’ processes from underwriting, pricing the risk, or completing the customer details to triggering actions in a CRM tool. For example, insurance software can facilitate pre-population of data fields to minimise the struggle of MGAs’ customers in filling question sets and partner brokers in answering questions before taking on a risk.  

Regarding risk taking, MGAs seek choice and value, and need the functionality that would allow them to look at multiple different options, price points, and attachment points for risk assessment. Anyone starting to provide this kind of functionality for brokers will start to get a lot more engagement, especially with risk managers.  

Steve Tunstall's Quote about insurance software

For MGAs’ products to be seen by Brokers, insurance software should enable MGA Managers to build a product once and point at different distribution channels, including traditional software houses.  

Anna's Quote about insurance software

Since customer needs no longer fit into commercial or personal lines, insurance software must and can provide the capability to design offerings outside current product boundaries. This also means the ability to apply or adjust products in real-time for different distribution channels to proactively meet the needs of customers or Brokers. 

Insurance software must support MGA Managers in coping with the reporting needs of the MGA itself and the needs of regulators, capacity providers, and reinsurers. The compliance functionality must be adaptable as rules change. 

Anna's Quote If these challenges sound familiar to you as an MGA Manager and you are seeking insurance software that will help you perform better and reduce manual work, take the first step and get in touch! 

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