CII launches new chartered status for MGAs

Professional body the Chartered Insurance Institute (CII) yesterday launched a new chartered status for individuals employed by or firms acting as managing general agents (MGAs).

The new Chartered Insurance Underwriting Agent title, defined as a qualification pathway that aligns with the CII’s existing qualification set, has been delivered in conjunction with the Managing General Agents’ Association (MGAA), as well as with the support of startup alliance Insurtech UK and Her Majesty’s Privy Council.

Speaking at Lloyd’s of London yesterday afternoon, Steve Jenkins, development director at the CII, clarified the role of chartered status for MGAs, explaining that it not only aids the talent attraction of younger generations, but it is also key in boosting the public’s perception of and engagement with the insurance sector, when mistrust of financial services appears to be at an all-time high.

He said: “In today’s world where, if anything, trust, confidence, doing the right thing, consulting a professional is fundamental, whether it’s from the end customer, the insurer, a broker, any part of the sector. This is a place which I think will be a real area of emerging quality.”

The chartered status, for Jenkins, has three key strands: nurturing knowledge, prioritising client centricity to drive professionalism and serving society to build public trust.

Criteria

In order to achieve the new chartered status, MGAs will need to have at least one board member with a chartered status, plus CII members on its board; 90% of core staff will need to be CII members; the firm has to display a commitment to professional development and align with the CII’s code of ethics; and the MGA has to have an established trading history of at least three years.

Individuals seeking the chartered title, on the other hand, must have at least five years of sector experience, hold an Advanced Diploma in Insurance and be a CII member.

Chartered membership currently costs £230 a year for individuals, however there is no cost to convert an existing chartered title to the new status, if this is more relevant for a member’s job role.

Upon launching, three MGAs and one individual have received chartered accreditation. This includes Manchester Underwriting Management (MUM), Geo Underwriting and Xbridge, trading as Simply Business. Philip Williams, managing director at Simply Business, gained an individual accreditation.

Accreditations are awarded on an annual basis.

Charles Manchester, chief executive at MUM, said: “We are delighted to be one of the first MGAs to achieve chartered status. We’ve always done business ethically and now this just underlines that we take training, ethics and professionalism seriously.

“Much is said of trust these days. My name is over the door and, for me personally, it’s essential that Manchester Underwriting Management is trusted – by our staff, our broker friends and their customers, and of course our capacity providers.

“Achieving chartered status is a declaration that we want people to know that we have these values and take them seriously.”

A growing sector

The CII’s professional standards director Melissa Collette explained the desire for a chartered title for MGAs, saying “There is a real appetite for professionalism”.

She continued: “This burgeoning sector has over 300 firms, more than 5,000 people working in it and currently underwrites 10% of the UK’s £47bn general insurance premiums.”

Jenkins added that CII research found that 81% of individuals look for firms with a chartered status when looking for professional finance or insurance advice; a further 60% view chartered status as an indication of professional qualifications.

“Being accredited by a professional standards body, [evidencing] some kind of knowledge above and beyond the regulatory requirement and doing the right thing in terms of committing to ethical standards, whilst it’s always been relevant, it’s even more relevant now in a world where people are looking for safe harbours and looking for firms who when they commit to do the right thing will have a positive impact on customer outcomes,” he added.

Uptake

Jenkins said that if the status received 25% uptake over the next five years, he would deem the pathway a success.

Anecdotally, Sian Fisher, chief executive at the CII, confirmed that many underwriters working at MGAs want “parity of esteem” with their peers employed by insurance companies, something the new chartered status can provide. She continued: “It’s showing that you are a professional in your role.”

She added: “There’s a history around a certain type of binding authority which has made the image of delegated authority maybe have a bit of a dubious past and there have been some famous stories about things going horribly wrong in that space. This is all part of turning that dialogue around and saying it doesn’t have to be like that.

“Some of these underwriting agents, they’ve been around for 50 or 60 years and [are] highly professional, but that’s the image that you want the sector to have, not the image maybe of [the] wild west and I think this is all part of showing that the profession of being an MGA is ‘growing up’.”

Recognition

For Peter Staddon, outgoing managing director of the MGAA, the most important component of the new chartered status is recognition. “We’ve started to get the regulator, the FCA, because we’re regulated [by them], the PRA, which we’re not [regulated by] but they look over the shoulders, the FSCS, the FOS, the government – they’re all looking at us in a much more professional light.

”This is evidencing what we are doing already. To me, that’s really encouraging.

“I would dearly love to see the market in general pick it up. I would like to think the impact for the MGAs themselves, it gives them designation, it gives them that capability and then the brokers can say ‘we’ve going to deal with these people because they’re chartered so my client’s business can go through that route’.

“I think it’ll have a big impact, but it’ll take time. Things don’t happen overnight.”

When asked whether chartered status should be a mandatory regulation, Staddon responded: “Public trust will swell if [consumers] know we do this voluntarily. We do this because we want to and to me, that has a greater power to the consumer.”