{"id":1265,"date":"2016-11-06T18:58:50","date_gmt":"2016-11-06T16:58:50","guid":{"rendered":"https:\/\/insly.com\/?p=1265"},"modified":"2024-03-17T18:47:20","modified_gmt":"2024-03-17T15:47:20","slug":"7-things-to-consider-when-implementing-it-for-mga-or-insurance-brokers","status":"publish","type":"post","link":"https:\/\/insly.com\/en\/blog\/7-things-to-consider-when-implementing-it-for-mga-or-insurance-brokers\/","title":{"rendered":"7 Things to Consider when Implementing IT for MGA or Insurance Brokers"},"content":{"rendered":"
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In today\u2019s world, IT systems play a very important role in the success and sustainability of Managing General Agent (MGA) business. To outline the importance of that, consider the following quotes:<\/p>\n

\u201cWe estimate technology could reduce the combined ratio by as much as 21%\u201d<\/i><\/p>\n

~ Morgan Stanley and the Boston Consulting Group<\/p>\n

\u201cDuring the past months, Lloyds have responded to FCA pressure to ensure that data capture and reporting standards are continuously improved. Some new coverholder applications have been rejected where they could not demonstrate sufficiently adequate risk, premium and claim data capture and reporting systems. Coverholders need to avoid reporting formats that require re-keying of information and the need for manual intervention.<\/i><\/p>\n

Coverholders who already hold authority will not have that authority removed if they do not yet have adequate report generation systems, but such a move is surely just a matter of time.\u201d<\/i><\/p>\n

~ Lloyds & FCA, study conducted by JTW Connect, 18 September 2015
\nGiven that Insly SaaS insurance software is used by many MGAs, we summarized our findings in some easy-to-understand suggestions that you should keep in mind when implementing insurance software.\u00a0<\/b><\/p>\n

No double-keying of data<\/b><\/h3>\n

When setting up an IT system, you should build it in such a way that prevents any double-keying of data when information flows from Clients to Underwriters. The standard information flow is as follows:<\/p>\n

    \n
  1. Insured fills out the proposal form (Word) and Insurance Broker emails it to MGA<\/li>\n
  2. MGA inserts the information into their IT system (this can be Word or Excel) and creates the proposal document<\/li>\n
  3. MGA sends proposal to Insurance Broker, who forwards it to Insured<\/li>\n
  4. After Insured accepts the proposal, Broker asks for insurance policy from MGA<\/li>\n
  5. MGA prepares the policy document from their IT system (again, this can also be Word or Excel) and emails it to Broker<\/li>\n
  6. MGA sends the policy data to Underwriter with Bordereaux (Bordereaux is also often prepared manually)<\/li>\n
  7. Underwriter inserts the data from Bordereaux to their IT system<\/li>\n<\/ol>\n

    It is quite obvious that throughout that process, a lot of manual work is done, and in addition to unnecessary costs, there is considerable potential for error inherent in the process.<\/p>\n

    Aim for simplicity of the user interface, but not on product and tariffs<\/b><\/h3>\n

    Unfortunately, it is usually the other way around in the London market \u2013 products are very simple, but the sales process is very complicated. The reason for this is usually quite simple \u2013 if you do not have an IT solution or if you have a bad IT solution, then you need to keep your products simple (fit on one A4 piece of paper). After selecting the right IT solution, you can turn it the other way round \u2013 create more complicated products that enable you to do much more accurate underwriting and thus increase your profitability, but simultaneously simplifying the sales process considerably for the Client, Broker and yourself.<\/p>\n

    All your data in one system<\/b><\/h3>\n

    Aim to have all data (e.g. underwriting, clients, policies, invoices, claims etc.) in one system, or if that is not a possibility, then at least create the necessary integrations between the different systems. Of course, the latter is usually more expensive and does not give you the necessary flexibility, but it\u2019s still better than nothing.
    \nThis provides huge advantages in terms of simplifying processes and analysis. For example, if you have claims and insurance policies in one IT system, then:<\/p>\n