Time to turn up the volume on MGAs?
As part of the ‘day-to-day’ at Full Circle we’re monitoring the press’s coverage of managing general agents and the wider delegated authority market around the globe. And despite some reports that it is a sector struggling through lack of capacity, the numerous launches, MBOs. M&A activity and appointments, as well as new products and deals across the sector, point rather to its continuing buoyancy. Its fundamental role in driving change across the market and addressing the protection gap is however really underplayed.
I was particularly drawn to the recent coverage given to the launch of Mexican insurtech start-up Super.mx. The founders, speaking about their Series A fund raise, were at pains to mention that, unlike most Latin American start-ups in the tech space, they are an MGA and not an aggregator or carrier.
Their CEO, Sebastian Villarreal, described their MGA status as the ‘best of both worlds’ as they are able to handle “the entire user experience just like a direct-to-consumer carrier, but with the breadth of product choice offered by an aggregator.”
Super.mx is focusing on tackling underinsurance, a particular challenge in LatAm and a “very acute” problem in Mexico specifically, according to Villarreal.
Super.mx's boss believes underinsurance isn't a matter of culture but that the insurance products that exist in the market “just suck”. He cites the cost, difficulties in buying products and their perceived value.
MGAs are ideally placed to address this vacuum. The breadth and depth of MGA businesses and the capacity providers they support and products they underwrite, enable them to respond to this need for more responsive products and to tackle barriers in the customer experience and the protection gap.
The emergence of new capacity providers and hybrid fronting models are bringing increasing stability to capacity, insurtech partnerships and the development of solutions such as microinsurance, parametrics and embedded covers are offering MGAs the opportunity to play their part in creating greater accessibility to the cover customers need.
But this message is often not getting through and MGAs across the board need to communicate their role and the benefits they can bring loudly and proudly.
This communication should also reflect the dynamism and the positive changes that MGAs and their approaches represent. Now, I'm not advocating that all MGAs need to ‘get street’ in the tone and language of their communications. But they should be louder. Emphasising the appetite and capabilities of MGAs will help to demonstrate that the insurance industry is responding to the changing world and expectations, and the insurance market’s essential role as an enabler and active participant in supporting businesses and in addressing the protection gap. Now that’s something to shout about.