The Evolution of MGAs: Leveraging Data and Technology for Growth

Managing General Agencies (MGAs) have seen significant growth, especially in the excess and surplus lines (E&S) market. Historically, MGAs faced workflow challenges when dealing with non-standard risks. In the 1990s, the transition from paper to digital was limited, with early digital tools lacking integration capabilities. This made updating rates and forms a daunting task.

A New Era for MGAs

Modern MGAs are now embracing automation and advanced technologies, positioning themselves to identify growth opportunities despite economic challenges. The insurance industry faces increasing risks, with natural catastrophe losses exceeding $100 billion annually for four consecutive years. This has led carriers to reassess their portfolios, raising premiums and pushing more risks into the E&S market, thereby increasing the role of MGAs.

The Role of Data and Technology

Today's MGA-carrier partnerships heavily rely on effective data and technology integrations. According to a Clyde & Co. report, 65% of carriers prioritize data and technical expertise when evaluating MGAs. Successful MGAs focus on data quality, integration, and process improvement, utilizing automated validation tools and robust data security measures to enhance data accuracy and efficiency.

Digital Workflows and Data Analysis

Digital workflows offer MGAs significant efficiency improvements. Automating processes for secure data exchanges increases accuracy, improves communication, reduces turnaround times, and strengthens carrier relationships. Better data aggregation and analysis enable MGAs to make informed decisions in risk selection, pricing optimization, loss ratio analysis, market analysis, and product development.

The Future of MGAs

In the future, data standardization and real-time verification will become the norm, enabling seamless data exchanges between MGAs and carriers. To capture growth opportunities, MGAs must adopt faster, more reliable data tools and processes.