Home insurance Building the MGA of the future starts right now

Building the MGA of the future starts right now

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Managing general agencies (MGAs) are going through a significant
transition right now. Technology and the changing workforce
have impacted the insurance market broadly, and MGAs are not
immune to the disruption.

Standing by as the insurance industry moves forward isn’t an
option for agencies and underwriters that want to maintain both
growth in their bottom lines and meaningful value propositions
for brokers and carriers.

“By virtue, MGUs and MGAs, program administrators, are the
middlemen,” said Rekha Schipper, president of Tangram
Insurance Services. “How can we make sure we stay ahead,
make sure that we take advantage, and make sure that we
continue to be relevant and meaningful to a broker, to a carrier,
to a tech investor, to say, this entity still belongs in the middle of
all of this?”

Investing money in thought leadership, learning how carriers
collect and store data, and making a real effort to talk to brokers
about the tools they need are just a few of the ways some MGUs
are figuring out their new place today and safeguarding their
roles for the future.

The average broker especially has a lot of useful knowledge to
offer. If an MGU can help them reduce costs or make their
deliverables look more sophisticated, they can build a strong
interdependence that will last.
“We fall in the trap sometimes of only managing our larger
agents and I think, as an MGU, you have to get religious around
understanding how to manage any agent, whether they place
$100,000 of business with you or $1 million of business with
you,” said Schipper.

As for tech, insurers are adopting new ways of doing an old
business, though that adoption hasn’t been as fast as in other
industries.
“In the last year or two, we’ve all realized there’s been a shift and
acknowledgment by the technology community that there is a
reason why insurance hasn’t changed as rapidly over 100 years
and there are things that are embedded in it that make it unique,”
said Schipper.

Yet an MGU is the most natural outlet for technology to plug into.
Established distribution channels and the thousands of brokers at
an MGU’s fingerprints have caught the attention of tech
companies who can make an MGU’s work more efficient.
“We can bring programs to the market faster. We can get out to
more brokers because they can get on our platform. We can
reduce our expenses as an MGU because now we’re automating
a lot of things,” explained Schipper, adding that there’s “an
unprecedented opportunity” for partnerships between
technology vendors and MGUs.

As for a workforce that looks different than it did 30 years ago,
Tangram leads by example. About 80% of its employees are
millennials and the organization is 75% female, with a majority of
the executive team being comprised of women.
It’s not by accident – these numbers are the result of intentional,
and necessary, hiring.

“The biggest thing we can do to pull our MGU forward, and look
like the MGU of the future, is start to cultivate it at the bottom
levels, so in three, five, 10 years there is a dynamic pool of
younger people who started out in their 20s, who are well-
educated, well-versed in insurance,” said Schipper.
It’s clear that MGAs need to tap into changes in the market today,
as an evolution of the industry slowly picks up steam, if they’re
going to thrive decades down the line.

“The MGU of the future needs to be able to catch the ball
wherever it’s passed to you on the field, whether it’s the 50-yard
line, the 20-yard line or the end zone,” said Schipper. “Historically,
we’ve always been passed the ball near the end zone.”

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