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Australian Underwriting Agencies: Market Outlook

Australian underwriting agencies – like MGAs in the UK - have complex operational, accounting, and reporting needs, which are distinct from brokers and insurers. They need a technology platform with the flexibility, functionality, and data capacity to enable profitability and growth. 

Underwriting agencies play a critical role in the Australian insurance market, enabling customers to find more tailored cover while giving insurers a valuable route to specialist markets. In fact, data from Insurance Business found that 72% of Australian brokers now have up to 50% of their books underwritten by underwriting agencies. 

Yet, as Insly’s sales team discovered on their recent trip to Australia, despite the rapid growth of the sector, underwriting agencies are operating with technology that lacks the functionality and customisation they need.  

Many underwriting agencies still rely on broker management systems (BMS) to handle their mid to back-office processes, which are a poor fit for their more specialist underwriting and reporting requirements, including building, and writing specialist products. Meanwhile, newer technology players frequently struggle with their unique taxation and reporting needs.  

As the market matures and competition heats up, this mismatch is holding back underwriting agencies’ efficiency and ability to optimise the customer experience. Both these issues are ultimately hitting the bottom line and their ability to scale up operations. 

It’s time for underwriting agencies to bite the bullet and invest in technology that meets their current needs, has the flexibility to scale with them, and will enable them to maximise emerging technologies in the years to come.   

Building data foundations 

Underwriting agencies have several unique characteristics, which mean that they need a customised technology platform. 

  • Building specialist products: Underwriting agencies differentiate themselves by serving specialist markets and building products quickly in response to customer trends. To do this effectively, they need technology with flexible data capabilities to capture, process, and store all the facets of these specialist risks. Off-the-shelf broker management systems simply don’t have this capability. 
  • Finance and accounting: Underwriting agencies also have unique accounting needs and are governed by complex tax schemes and rigorous reporting requirements from their capacity providers, regulators, and stakeholders. Most BMSs lack the ledger technology to carry out these processes in the most efficient way and enable comprehensive reporting. 
  • Compliance and regulation: The insurance industry is heavily regulated, and underwriting agencies must adhere to various compliance requirements. Most BMSs can’t be tailored to ensure compliance with industry regulations and standards, leading to more manual work for employees, while reducing the risk of non-compliance and potential penalties.
  • Integration with partner systems: Underwriting agencies work closely with carriers, reinsurers, brokers, and other partners, requiring seamless integration with their systems and processes. A standard BMS is unlikely to facilitate these integrations easily, whereas a dedicated platform would enable smoother collaboration and communication between different parties in the insurance value chain.

Is it worth the investment? 

Cost is always an important consideration, and investing in a more sophisticated solution naturally comes at a price. However, rather than focusing on short-term costs, underwriting agencies should look at the long-term return on investment (ROI). Relying on legacy and inefficient IT is hindering their ability to innovate, maximise profitability, and grow, whereas the right technology would reduce overall outgoings through streamlining processes, cutting operational costs, and reducing time-consuming manual tasks, such as collecting customer data, risk surveys, and reporting.

Platforms such as Insly are ideal for underwriting agencies, designed around how they work, and with a no-code approach that is fully customisable to product type and business demands, but also straightforward to implement, without any lengthy development time. With our system, an underwriting agency can handle around double the gross written premium (GWP) as with their current system; not only significantly boosting profitability, but also giving them the bandwidth and the data foundations to take their business to the next level. For most companies, the annual cost of a no-code platform would be equivalent to a full-time employee, yet the ROI would far exceed that, within as little as a few months. 

Insly expands ‘down under’.

Insly is on a mission to give Australia’s underwriting agencies greater flexibility and scalability through no-code software. Our platform has been developed to make automating and streamlining insurance processes as fast and straightforward as possible, while also customising to a company’s specific needs. Taking a modular approach, the platform covers the entire insurance lifecycle from quote and bind, through to policy administration, claims, and finance and accounting. Meanwhile, its open APIs mean it integrates seamlessly with existing software and systems and provides the ideal foundations for collecting and leveraging data to drive more tailored products, happier customers, and business growth. 

To find out more about how Insly can help your underwriting agency to digitise, book a demo now. 

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