TORONTO, ON, NOVEMBER 15, 2023/insPRESS/ – Gary Hirst, CEO and President of CHES Special Risk, a leading Managing General Agent (MGA), delves into the burgeoning phenomenon of Brokers increasingly forging strategic alliances with MGAs. Hirst, recognized for his industry experience and forward-thinking approach, provides valuable insights into Transformative Trends Reshaping the Insurance Landscape.
In recent years, the insurance sector has witnessed a paradigm shift, with traditional models being recalibrated by innovative collaborations between Brokers and MGAs to cater to the evolving demands of insureds.
In a candid Q&A session, Hirst sheds light on the driving factors behind this trend, the benefits brokers reap from these partnerships, the insurance products best suited for such collaborations, and the key takeaways from successful experiences.
Q1: What fuels the rising trend of brokers collaborating with MGAs in the insurance industry?
GH: The surge in brokers collaborating with MGAs can be attributed to several pivotal factors. Firstly, the insurance market’s hardening, characterized by stricter underwriting and pricing, has spurred brokers to explore alternative solutions. Furthermore, a decrease in capacity and available contracts with conventional carriers has prompted brokers to turn to MGAs. When brokers encounter the “yes” attitude of MGAs as opposed to a “no” stance, they find it more conducive to their business. MGAs also offer specialized expertise and exceptional communication skills, making them invaluable partners.
Q2: What advantages do brokers gain from partnering with MGAs, and how do these advantages impact their business operations and client relationships?
GH: Brokers derive substantial benefits from partnering with MGAs. MGAs display a creative appetite for underwriting, consistently developing new product applications. Prompt response time is critical factor in the insurance industry, and MGAs excel at providing quick responses since most insurance purchases are last-minute insurance purchases. This not only streamlines business operations but also enhances client relationships, ensuring timely and efficient service.
Q3: In your experience, which types of insurance products or markets are especially suitable for broker-MGA collaborations, and why?
GH: Broker-MGA collaborations are exceptionally well-suited for niche products and markets. MGAs are agile and can swiftly address specific needs. At CHES Special Risk, we excel in construction, property and liability class markets where we possess the data to support underwriting decisions effectively. For instance, sectors like Salon and Spa, which involve substantial liability components, or complex construction capacities, are areas where MGAs shine. They comprehend the intricacies of these markets and can tailor insurance solutions accordingly.
Q4: What challenges or considerations should brokers keep in mind when selecting an MGA to work with, and how can they ensure a successful and productive partnership?
GH: Brokers should be mindful of the capabilities, approach, and reputation of the MGAs they choose as partners. It’s crucial for brokers to realize how easy it is to work with an MGA – a simple phone call or email can initiate the process. Open communication and a shared understanding of how straightforward it is to do business with their chosen MGA partner are essential. Transparency and clear expectations are the cornerstones of a successful and productive partnership.
The trend of brokers collaborating with MGAs in the insurance industry arises from the need for innovative solutions in a challenging market. MGAs bring unique advantages, specializing in niche markets, customization, and a broker-centric outlook. Successful partnerships are built on clear communication and understanding between brokers and MGAs, creating a mutually beneficial situation.