The third annual MGA report from Clyde & Co has lessons and positive conclusions for MGAs. Carriers and Insurtechs.  The overall key findings are summarised below whilst here we focus on the aspects of claims which are a priority for improvement.

The research over 50 Carriers and MGAs how they anticipated claims evolving in 2022. 

Over 40% of both carriers and MGAs anticipate a higher frequency of claims and over 20% expect a greater proportion of fraudulent claims. Seven times as many MGAs as carriers expect a greater severity of claims. 

"Moving forward, Carriers and MGAs can expect to encounter challenges as they strive to deliver value for insureds, pay claims promptly and maintain rate adequacy.

Still, there is a conviction among both carriers and MGAs that the claims management process requires improvement – a finding evinced by 87% of carriers and 67% of MGAs.

Respondents to our survey point clearly to the areas where improvements can be made in order to drive improved claims performance. Clearer processes, especially where TPAs are involved and faster communications emerge as the two top priorities. There was also considerable support from all parties to consider automating processes around lower value claims, or delegating claims authority more fully."

Clyde & Company

Which technology partners can help deliver these improvements plus the other aspects of MGA-Carrier collaboration and communication from Quote and Bind through Claims to Settlement?

A key requirement of any technology partner is to bridge the existing systems of both carriers and MGAs which requires considerable integration expertise, resources and APIs. In 2019 and 2020 the popularity of the Lloyd's market for MGAs was in decline.  Clyde & Co reports a sharp reversal of that picture in 2021 and beyond. The market is more popular with carriers than it has ever been – almost half (47%) believe that it provides the best environment in which to grow and develop MGA business .

That suggests technology partners should demonstrate high competence coping with the complexities of Lloyds combined with the next-gen capabilities insureds will expect and indeed demand. 

Technology partners will need to have scaled up to offer the resilience, stamina and resources to deliver  the innovation and transformational outcomes the report describes. Unless the carriers and MGAs concerned are willing to accept incomplete platforms and put great resource into bridging the gaps.

No one technology partner will offer all the pieces if the technology jigsaw however much they promote the "end-to-end" message or if they do they will tend to be the older, on-prem platforms that take too long to deploy, cost to much and require too much of central IT's resources.

So technology partners that demonstrated the strategy and capabilities of effective integration with other credible insurtechs will be top of the list. Examples include: -

NETCALL which has demonstrated its capabilities in The London Market and partners with Acord, CGI and other key players.

RightIndem which has integration capabilities at its heart, credible partners from Quote and Buy to Payments and, of course, digital claims that combine the straight-though-processing automation Clyde & Co highlight plus complex digital claims handling processes combined with human expertise.

Duck Creek is often labelled as one of the incumbent platforms being outflanked by newer agile cloud-native rivals but has reinvented itself with the same capabilities and is very well funded by Insight Partners and other major investors. It is also a leader in the 2021 Gartner P&C Core Platforms Magic Quadrant.

Of course there is more than just claims and as promised here is the Clyde & Co summary and key findings. 

  • Confidence is recovering fast, particularly among MGAs. Over two thirds (69%) expect partnerships will increase in 2022, a view shared by one third (33%) of carriers.
  • The impact of Covid-19 on capacity has not been long lasting. 84% of MGAs say the impact has been neutral or positive compared with 74% of carriers who feel the same way.
  • The biggest impact of Covid-19 on carrier-MGA relationships has been in terms of wordings, with 80% of carriers and 56% of MGAs saying it has increased focus.
  • 2021 has seen enthusiasm for Lloyd’s return. 47% of carriers believe the marketplace provides the best environment to grow and develop MGA business versus only 12% in 2020. 20% of MGAs favour Lloyd’s – an improvement of three percentage points on last year.
  • For carriers, market access remains the most desirable trait in an MGA, a view cited by 60% of respondents.
  • MGAs continue to value market reputation, and experience in their area of specialisation, cited by 33% and 31% respectively. However, the standout requirement this year is that fully 89% want capacity stability and longevity.
  • 47% of carriers and 42% of MGAs think claims will increase in 2022. 27% of carriers and 25% of MGAs also anticipate a greater incidence of fraudulent claims.
  • 87% of carriers and 67% of MGAs think the claims process requires improvement, with the majority citing faster communications and clearer processes, especially involving TPAs, as easy wins.

There are many other technology partner options of course for carrier-MGA initiatives and I have summarised these in other articles.

Major core platforms Guidewire, Duck Creek, Majesco, ICE, Pega, Innovation Group and so on. Good on breadth of functionality but sometimes lacking in specifics e.g. claim management. And traditionally involving Capex, considerable SI costs and high annual licensing costs though that is changing.

Quote & Buy, MTA & Renewal Platforms like Go-Insur, HUGHUB, Instanda and iptiQ that enables an insurer to allow a customer to interactively manage all their policies from one dashboard

Digital Claims Platforms RightIndem, Synergy Cloud, Snapsheet, Claim Technology, ClaimsGenius, Salesforce Industries, Five Sigma, 360Globalnet,  etc

Insurance Ecosystems Core Logic with Symbility, Verisk, LexisNexis, Mitchell International, CCC etc

Point Solutions Weathernet, Tractable, Audatex/Solera, Shift, Friss, Sprout.ai, and many others

Combined claims services and technology providers Crawford & Company, Sedgwick, Davies Group, Claims Consortium Group. Control€xpert etc.

No-Code/Low-Code app building platforms i.e. build yourself but with built in accelerators from Unqork, Netcall, Ushur …

Embedded insurance Wakam, Wrisk, Qover, Trov, Cover Genius, Bsurance, Kasko, Inshur etc

You can follow the link at the bottom of this article to download the full Clyde & Company report which I recommend reading.