Revealed: The biggest mistakes MGAs are making with data

Managing general agents (MGAs) have been told that they must keep their data as clear and relevant as possible in order to keep securing capacity.

Speaking at the MGAA conference in Old Billingsgate last week (6 July 2023), Aventum’s chief underwriting officer Gavin Dollings said MGA’s can “fall foul of focusing on the wrong things” and having “too much data”.

Capacity is capital provided to an MGA by its insurer partners and determines the amount of risk an MGA can underwrite on behalf of these insurers – without it, an MGA would not be able to function.

Dollings said that when it came to data, it had to “pass the ‘so what’ test” for capacity providers.

“Otherwise, I’ve seen this happen with MGAs – their deterioration [goes] towards a point where they lose their capacity.

“They had lots of performance data, they had lots of dashboards – but the burning red flag was missing because they didn’t focus on the high level numbers and the ‘so what’ test.”

Inconsistencies

This came after some MGAs told Insurance Times last month (2 June 2023) that capacity was very much out there and available, although the requirements to secure it had become more involved.

Adrian Saunders, commercial director at specialist insurer Ecclesiastical, said that understanding the importance of data was crucial for MGAs to secure capacity.

He added: “MGAs are a grown-up part of our distribution landscape and have matured over time.

“What underpins that is that use of and understanding the importance of data, because, ultimately, that’s what helps them secure new capacity, but [also] look after and maintain the capacity that they’ve got.”

Speaking at the MGAA conference, Josh Chandler, sales executive at Mulberry Risk, said the biggest mistake he had seen MGA’s make was not having data in a place where they can understand and consistently use it.

“We’ve found that with some, they will have inconsistencies that have been left for a long time,” he said.

“Then when it comes to the point of when they have to use analysis and actually get a capacity meeting, the carrier has asked them for a specific thing or help with triangulations and the data is all over the place.

“You have to do a massive exercise to clean it and that takes a lot of time, especially when having these negotiations – you want it to be fast.”

He added that data reports should also “answer specific questions” to give MGA’s the best chance of securing capacity.

Dollings added: “It [data] needs to be compared to something.

“So, its lovely numbers, but its got to be compared to a target.”