Digital represents huge opportunity for lagging MGAs

Managing general agents are failing to deliver a ‘modern customer experience’, many having no single view of the customer through their IT platform. This is among the findings of a survey carried out in June by the Managing General Agents' Association and Aventus.

Of the 64 MGAA members that completed the survey, only 17 knew whether or not their customer data was in a format that provided commercially beneficial insight or the intelligence for advanced decision making. Just a quarter offer ratings based on real-time third party data, and a third supply customer data for account-based marketing and cross-selling.

The association says the findings highlight a considerable untapped opportunity for brokers if they can enhance their ability to access and make use of customer data. An overwhelming 90% of brokers and MGAs believe investment in technology will accelerate recovery from COVID-19.

Commenting on the results, Peter Goodman, Aventus CEO, said: “This survey proved to be a very interesting exercise. Clearly whilst the majority of MGAs have made great strides to make better use of data, driven through technology, there is still a long way to go if more than half still don’t have a single view of the customer, or perhaps more worryingly ‘don’t know’ if they do! This should be a given starting point for delivering customers the modern buying experiences they have come to expect from other sectors like retail.

“If 90% believe that technology will accelerate recovery, and 60% believe customer insight driven technology investment will deliver the greatest rewards, then there is a clear understanding of the need to change, and MGAs have quickly come to the realisation that digital practices are a vital part of the insurance ecosystem. The onus then must be on the software providers like Aventus to show MGAs a clear and affordable path to digitisation – no matter what their size or specialism. The future is about brokers and MGAs enabling themselves – all MGAs can become insurtechs now with help from the right insurtech partner and a desire to change.”

Representing UK MGAs, the Managing General Agents' Association currently has 144 full members accounting for over £6.1bn in underwriting capacity.

Report findings (Source: MGAA & Aventus)

Some 55% of MGAs said they were aware of affordable technology solutions on the market for SME brokers and MGAs, and yet 33% still said they didn’t know what was available. This highlights either a lack of marketing on the part of software providers and/or perhaps a degree of inertia amongst those MGAs who haven’t yet invested time in identifying the affordable options available.

The ‘need for speed’ in the digital race has been well documented. Amongst those surveyed, by comparison, 68% of MGAs said their existing platform takes more than a minute to add an endorsement; 41% said it takes more than a week to build a new product, and for 24% it takes several months.

Just 17% of MGAs had one single IT platform, 70% have multiple platforms (more than 2) and more than half (52%) operate more than four platforms.

When asked what MGAs and brokers are doing to reach a stable ‘new normal’ post-COVID-19, the overwhelmingly popular response was investment in technology, e-trading and digital strategies (48%), followed by 16% who revealed that they are still thinking and planning. 12% didn’t know, 8% answered remote working, whilst another 8% simply said ‘work harder’.

According to the survey, MGAs' greatest challenge post-COVID-19 will be managing the issues around remote working (32%); hard market and capacity issues (20%); digitisation (20%); global economics (16%); a rise in claims (8%); poor reputation with customers (4%).

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