5 Innovation. MGA Zen – The art of building a well-run intermediary
By David Plummer Group CEO, Bluefriars Group
5. Innovation
It will not be a huge surprise to most followers of the managing general agent (MGA) and intermediary market that, with MGAs now making up 10% of the distribution chain, many sectors are either well or over-served, (see my previous article: MGA Zen – The art of building a well-run intermediary #4 – Markets).
Bluefriars meets regularly with key markets offering delegated underwriting authority and their message in quite clear: if your offer is unremarkable, interest is likely to be low. Also, where there is interest, competition for scarce capacity will be fierce.
One proven way to overcome this is innovation. Unsurprisingly, this comes in many forms and often with risks attaching. Typically, the main routes to innovation are:
1. Means of distribution
2. Method of distribution
3. Rating model
4. Rating methodology
5. Subject matter insured
6. Proximate cause insured
7. Novel distribution market(s)
Any new method of distributing capacity that attracts more or novel customers at a profit is likely to interest underwriters. However this must be balanced against the risk of innovation, which include but are not limited to:
1. Uncertainty of uptake
2. Actuarial uncertainty
3. Regulatory uncertainty
4. Unforeseen harm
5. Unforeseen volatility
At Bluefriars, we are used to new ideas. We can help risk assess, plan, and launch your big idea. Contact us at principal@bluefriars.co.uk to discuss new product launches and our free risk assessment of your big idea.
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