Blog: MGAs can drive market innovation

Sequel’s CEO, Ian Summers, moderated a session on the “Evolution of MGAs and coverholders in the Value Chain” at the Verisk Vision conference in London last week.

The growing role of MGAs and coverholders the Lloyd’s market will only increase as the market looks to deliver its aim to be the most technologically advanced in the world.

Paul Brady, Head of Policyholder and Third Party Oversight at Lloyd’s, outlined the role they play adding coverholders are currently responsible for over £10 billion of premiums annually, with coverholder business being a key area of growth in recent years.

The panel, which also included Paul Willoughby, Head of Digital Ventures Beazley, Kirk Maddern, COO of Liberty Specialty Markets, and Christian Kitchen, Head of Technology and Innovation at Miller, discussed their role believing that the market needs to spend more time understanding what clients want in terms of risk mitigation and insurance products and how they wish these to be delivered.

MGAs will play a key role given that they are often closer to the client than their Lloyd’s capacity providers. There was view that at present, whilst clients were concerned with costs, there were still occasions where the products they were offered contained coverages they did not want.

The question needs to be asked as to what the MGA brings to the insurer, and how the MGA or coverholder works with the broker to meet the needs of the client?

Lloyd’s has embedded technology across the process and Mr. Brady highlighted that Sequel’s Chorus product will be used to aid MGAs in the compliance process, and enable the market to speed up the process when an MGA or coverholder applies to access Lloyd’s. He added that Sequel’s Coverholder Workbench system has been welcomed by coverholders and is to be rolled out to a wider set of coverholders in the coming months.

In terms of technology the panel felt that there needed to be a new approach from the capacity providers.

MGA and coverholders already have systems and, as such, the new ecosystem of technology in Lloyd’s should ensure that insurers work the way the MGAs and coverholders want to work.

Currently, while MGAs and coverholders utilise their own systems, the use of bordereaux places limits on what technology can achieve in terms of reducing costs and driving efficiency.

The panel agreed the only way to drive efficiency through the system is to have a clear and simple conversation around technology to create a full understanding of the solutions.

“We need to make the whole process seamless, if we are to succeed,” explained Ian Summers.