Xceedance, AI in Action: AI helping MGAs to bring value and innovate, but guardrails are necessary

In the early 1980s, Artificial Intelligence (AI) in insurance began with simple, basic rule-based automation for data processing. Since then, however, it has evolved substantially.

Fast forward to the present day, and AI has now transformed into Generative AI, Large Language Models (LLMs), machine learning, real-time insights, advanced chatbots and AI Agents which support various functions such as fraud detection, underwriting, customer service and claims processing.

In January, the MGAA Breakfast Briefing – AI in Action: Transforming Insurance Operations – chaired by MGAA Chief Executive Officer, Mike Keating, gathered in the iconic Old Lloyd’s Library to unpack the real-world impact of AI across insurance operations, the challenges and opportunities on the horizon, data, governance,  and where AI is headed next. Here are our key takeaways…

MGAs add value to the insurance industry through their agility, flexibility, and innovation. In this same way, AI is enabling the development of new products by reducing time to market and allowing for faster, more efficient adaptations that improve product relevance.

Mark Christer, Chief Executive Officer of Wakam, noted that Wakam is using AI to scale without increasing headcount, and commented: “What we love about MGAs is their innovation and ability to find ways around problems – for this reason I think that the MGA market will always be here and will be successful.”

Brandon Nuttall, Chief Digital & AI Officer of Xceedance, said: “AI is also opening opportunities for MGAs and carriers – if you take a look at the actual liability that you could incur from embedding AI – that’s a risk that you need to insure.”

Speaking of these opportunities, AI has been able to automate the lower-value tasks in many businesses, creating more time for employees to turn their attention to high-value tasks, but is this a good thing?

Ryan Gill, Chief Executive Officer of Bspoke Group, agreed: “MGAs have got to be lean, agile and justify our role in the ecosystem. We need to provide a good service as well as speed and solutions – AI has really helped us do that. But it can be quite daunting, in that some people think that they are AI experts.  Our approach is not that AI is everything and that it’s going to transform us overnight. For us, it is about small incremental, test and learn scenarios across the business. We step back, look at problems that we would like to solve or solutions we would like to bring to our customers, and then we partner with experts and ask if AI can solve it. Some of those quick wins have been very low cost.”

For example, Bspoke Group uses a chatbot to answer routine customer questions. It also has an MGA that specialises in the military and uses AI to pull data through the system. Meanwhile, in underwriting, Bspoke Group uses AI to triage opportunities for proposals to free up underwriters’ time. It also helps the business from a fraud perspective to identify anomalies in personal data.

While there are several opportunities that AI brings, there are also pitfalls, and firms must adhere to ethics and governance.

Brandon said: “Organisations that treat AI like an end, rather than a means to an end, are the ones that may have difficulty embedding the capabilities of their organisations.”

Pranshant Tekchandani, Head of Lifecycle & Operations of Xceedance, added: “We are thinking about the implementation of AI, considering whether we work with various parties within the insurance ecosystem, we first select the opportunity areas. The other element is how scalable opportunities are. I agree that AI does not solve everything unless your processes are in good shape. You cannot have an AI programme going on where governance is not there. Lastly, another big part of this is getting the people along – we have seen questions about – what does this mean for us? We think of it as an efficiency play – how can people’s jobs transform?”

This is one area that does cause concern among the industry, with lower-level jobs being taken over by AI and entry-level jobs changing.

Mark noted a report from Stanford University, which found that graduate jobs in the last few years have reduced, with AI taking over lower-level jobs. Likewise, a report from Mckinsey and Company in February 2025 found that 30% of current hours worked could be replaced through automation by the year 2030.

However, compared to the number of jobs that AI is creating currently, it is not comparable to the volume of jobs lost or changed in terms of tasks.

Mark said: “What you will probably see is people using AI to become just as good as a more senior or experienced person. But you need to have the talent coming in, otherwise we are just going to have a shrinking height level and no-one in the bottom. If you are competent in AI, you will be able to get jobs elsewhere, as it will get rid of the lower-value tasks.  We have just tried to make AI part of the BAU.”

Prashant concluded: “AI is not here to replace you, it is here to help look at enhancing the work you do.”

Overall, the panel agreed that AI has opened up many opportunities in insurance, but firms must be diligent with ethics and governance internally, as the technology is not a solution to everything.

Find out more about Xceedance here: https://mgaa.co.uk/members/xceedance-ltd