Daily briefing: Tuesday - Ink leads the MGA battle

There are some interesting developments at managing general agency Ink Insurance. As reported by Insurance Times yesterday, the Essex-based underwriter is currently in the process of renewing existing capacity deals with insurers, as well as seeking new providers to help it expand its offering.

Negotiations between insurers and MGAs, however, are not always straightforward. In the past, many insurers have been critical of the model, including Aviva and AXA, which have both pulled back on some of their MGA deals.

Insurers have questioned whether MGAs can produce profitable results for them, particularly in a soft market where insurers are looking to cut the cost of distribution and do more business direct. For an insurer to hand over the underwriting pen to an MGA requires a huge amount of trust, and MGAs must prove that their quality of underwriting can offer something unique.

Strong support

According to Ink boss Mike Smith, the Giles-owned underwriter won’t have too many obstacles in his way when it comes to attracting insurers. He says that there is a line of capacity providers knocking down his door.

So have insurers’ appetite to MGAs changed or is Ink doing something different than its rivals? Despite claims by some insurers that MGAs, including Ink, demand high commissions in return for underwriting their business, Smith insists that some of its commercial deals haven’t changed in up to 10 years. He makes the point that insurers would not continue to support the business if they were not making returns.

But the battle now lies in convincing insurers to sign up to the model with commercial rates showing little signs of hardening. The market will be keeping a watchful eye to see if – and which – insurers jump on board the good ship Ink.

Too good to miss?

As one underwriter, Mitsui, winds down its commercial motor book, another spies an opportunity in the personal lines space.

Liberty Mutual has completed its takeover of Quinn Insurance and has first refusal on a slice of UK motor business. Liberty has one year to decide whether to buy the book from the administrators, but with an opportunity to attack the young driver market and the potential boom of telematics in 2012, it may not take much persuading.