MGAs optimistic about growth potential
Managing general agents (MGA) showed optimism about the sector’s growth potential in the latest MGAA Matters survey conducted by the Managing General Agents’ Association (MGAA) with over 57 percent saying they expected the number of specialist and niche MGAs would increase.
More than 38 percent of respondents felt MGAs would be at the forefront of addressing emerging risk and new products. The same number said there would be a greater diversity of capacity provision.
Insurance-linked securities (ILS) capacity, for example brings more efficient funding into the insurance market and MGAs may benefit from it.
The June 2018 survey also showed that over 42 percent of respondents now feel insurtech helps MGAs evolve their business model to be more customer-centric, a leap of over 20 percentage points from the MGAA Matters survey conducted in October 2017.
The MGAA is looking to enlarge the membership of the organisation to include insurtech companies as these are perceived as very similar in their scope and function to MGAs.
The view that MGAs can bring benefits to insurtech startups has strengthened with just over 42 percent of respondents now saying MGAs deliver underwriting expertise that the insurtech sector is still lacking. This compares with just over 28 percent last year.
The number of MGAs considering the development of an insurtech strategy has increased to over 38 percent in the latest survey from 25 percent in 2017.
“The survey shows a growing confidence and commitment from MGAs to harness the opportunities that insurtech can bring,” said Mark Birrell, ECO of Castel. “The future success of MGAs and insurtech are interlinked and so the fact that there is increased optimism in the sector has to be welcomed.”
Many MGAs have already prepared for the uncertainty around Brexit, according to the survey. Over 23 percent of respondents indicated they already had a Brexit strategy in place and over 30 percent said they were working with their capacity provider(s) on a plan. Less than 8 percent said they would wait until there was greater certainty on Brexit before developing a strategy.
“This latest survey highlights how MGAs are willing and able to adapt to the new and emerging dynamics of the market,” said Peter Staddon, managing director of the MGAA. “The uncertainty of Brexit and the shape of the future trading environment is a challenge for many. The government must take into consideration the significant investment in time and resources businesses are making in trying to prepare. Greater clarity around what the future will look like is important to ensure these actions have not been in vain,” Staddon added.
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