In the fourth episode of MGAA Conversations, Stuart Reid, Chairman at Partners& and PIKL and Non-Executive Director at Harbour Underwriting Limited and Qlaims Limited, sat down with Mike Keating to explore the challenges and opportunities facing MGAs in the current market and what the future holds for MGA-broker relationships.
When asked what he finds most exciting about the sector today, Stuart suggested that despite ongoing economic and regulatory challenges, it is a market full of opportunity for MGAs, brokers and insurers alike. In particular, Stuart highlighted the continued innovation happening across the board, both in terms of the implementation of new technology like AI, and the development of new products to protect against emerging risks.
Adding to this is the fact that relationships between capacity providers, MGAs and brokers continue to strengthen, which is creating even more opportunity for collaboration and forward-thinking across the sector, he explained.
Stuart also mentioned that, despite the insurance industry being viewed as ‘old fashioned’ with regard to diversity and inclusion, progress is definitely being made, which is hugely exciting for the future of the market.
Ongoing challenges
In terms of the challenges facing the sector, Stuart pointed to the significant regulatory changes we have seen of late, with an increased focus on Consumer Duty and, in recent weeks, further requirements for Non-Financial Misconduct information.
Another challenge, Stuart added, is the current economic uncertainty being felt across the country. He explained that these conditions are limiting access to capacity for some businesses, particularly small InsurTechs who may only just be starting out, and who in some cases are being viewed as riskier propositions by investors.
Stuart then went on discuss the “poor” service levels still being provided by insurers to their brokers, which, he said, is why so many brokers are now turning to MGAs to offer them what they need.
Brokers benefitting from MGA partnerships
Expanding further on the vital role of MGAs, Stuart explained that they are fulfilling a need that brokers “simply cannot get elsewhere”. He added that brokers get “better service, better claims settlements, better reactions and interactions” from MGAs in many cases, than they do from insurers.
Stuart added that what brokers really want form their partners is to be able to get hold of someone that can make a fast decision, that really understands what they are doing and is able to give the broker the information that they are looking for.
When asked about his predictions for the future of the MGA sector, Stuart concluded: “I really do believe that MGAs will rise and rise in importance”, adding that brokers and MGAs owning capacity from insurers may become an increasingly common trend.
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