|Our proposal was that the association would be directed by an Executive Committee comprising:
2 members representing the largest members by Gross Written Premium
6 members elected on a regional basis
Up to 3 co-opted members and
The Executive Committee would elect a Chairman.
The feedback from
the meeting was very positive and the majority of those attending said
that they were in favour of having their own trade association and that
they would join. Quite a brave commitment considering they had no idea
of the likely membership fee required. Nor did the Steering Committee!
Perhaps the bad publicity MGAs were getting in the insurance press at
the time, fuelled by some insurers who had suffered from poor choice of
MGA partners, led some to believe that the cost was secondary to having a
voice to respond.
We estimated that
the costs of running the association in its first year would be £65,000,
but were unsure how we could raise that sum. Would we be able to
persuade a sufficient number of insurers who, after all, would benefit
if we were able to raise standards in the MGA community as planned? Or
were there other sources of seedcorn capital we could tap?
The lessons learned from the meeting were discussed at the next Steering Committee meeting on 29th
November 2010. The Steering Committee by then had been strengthened by
the addition of Keith Stern to represent Lloyd’s and David Coupe of
Clyde & Co who provided valuable legal advice.
We were satisfied
that we had the support of a sufficient number of MGAs to proceed to
draft a constitution, register a company and open a bank account (with
nothing in it!).
From the very
beginning we thought it was important that we had the support of the
insurers upon whose capacity MGAs depend. I had already done the rounds
of the ABI, the IUA and Lloyd’s Market Association. I also paid a visit
to the DUMS and the DUCS at Lloyd’s. The DUMS is a committee of
Delegated Underwriting Managers and the DUCS is a Delegated Underwriting
Committee. They each have different members. They all knew our plans.
So we decided to call a meeting of interested insurers.
The insurer meeting took place at the offices of Clyde & Co on 18th
January 2011. By now, our constant revision of the budget led us to
revise our cost forecast from £65,000 to £175,000 - £250,000. We had
also decided that our seedcorn capital could be raised by charging
insurers and service provider members a one-off joining fee. The fee
scale we decided upon was:
MGAs - £1,250
Insurers - £2,500 plus a joining fee of £1,000
Suppliers (service providers) - £3,500 plus a joining fee of £1,500.
insurers and suppliers would be happy with the fee scale we were about
to find out. 46 people turned up to the meeting. Whilst the attendance
was a little disappointing, the mood was positive and we got the
Finally, we consulted the suppliers a week later on 26th
January 2011 at Lloyd’s. Whilst there were some objections to the
suggested fee levels, most were supportive. The Steering Committee was
concerned to limit the number of supplier members as a ratio of full
members. The interest among suppliers was growing and we did not want
suppliers to outnumber MGAs.
positive feedback from all three potential member meetings all we had to
do now was to get them to sign up! That, of course, was not quite as
easy as expected.
Reg will explain the outcome of that meeting and subsequent meetings in our next Newsletter.