Partially due to this, but mainly as a result of the hardening market,the sector is seeing a lot of change in carriers backing DA and this will continue in 2021.
For businesses to remain afloat in 2021 will require a similar focus to that which is required for such a business to begin – an emphasis on long-term strategic growth instead of immediate results.
“We are living through a time of radical uncertainty,” Rowley told Insurance Business. “And because of this, the MGA market faces challenges and opportunities. In terms of premium, hard market conditions mean the overall volumes of delegated authority business flowing into the London Market are actually unlikely to grow much in 2021.
Three key actions for MGAs in 2021
- Selective partners: A recognition that managing agents and carriers who continue to back DA are going to become more selective.
- Holistic relationships: Successful MGAs will embrace a multifaceted and holistic approach to carrier relationships, focusing not only on underwriters but the critical claims relationships too, as well as data, actuarial, compliance, IT and regulatory teams..
- Harnessing data: The inherent agility of the MGA model means that these businesses can make investment decisions, gather data on niche markets, accurately survey that data, and make changes to their portfolios to access the pools of profit based on that data much faster than many carriers.
“Top quality MGAs will be looking to create a much broader range of relationships with each of their carriers to ensure that they are in the right place to effectively answer any question posed to them, ideally before it arises,” Rowley said.
The value of adaptability – a call to action
For those MGAs which are currently finding it hard to replace their facilities, the COVID crisis acts as a real catalyst for addressing that faultline as quickly as possible.
2020 has shown the inherent value of being able to make decisions and changes to an operating model swiftly, and this should be the focus for MGAs going forward.
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