Recently, we asked our CEO, Paul Areida, and our president, John Bennis, to share their views on current trends that will affect the future of the MGA niche of the industry. Since Paul and John each have at least 30 years in the business, they have seen plenty of changes in technology. In this Q&A, they explore how mergers and acquisitions as well as international expansions are driving the desire to bring more insurance products online – and what technology companies must do to meet new challenges.
Part of our vision as a company is to support the trend to get more insurance products online. I know it’s a lofty goal because unfortunately not all products lend themselves to a complete online presence. For example, it is sometimes impractical to require the type and amount of information necessary to provide a correct rate online, but we understand – and support – the desire to automate more online processes.
We’re also seeing expansion internationally. Even though it may be difficult to do business in other countries due to financials, reporting and compliance requirements, we do see more and more MGAs figuring it out and opening branch offices internationally. Obviously, the more tech savvy the MGA is, and the more flexible we are in addressing global requirements as an automation partner, the more there are opportunities for growth.
Our customers are engaged in a tremendous amount of merger and acquisition activity. It seems this activity will be even more robust through the next year. I believe this speaks to the fact that companies in the MGA space have real value. And we provide support for our clients as they evolve and expand their businesses.
I think the drive for online products, global expansion and mergers and acquisitions underscores the widespread trend for more systems integration. We at MGA Systems continue to be technology agnostic. We are happy to integrate with any rater or policy administration system as well as third party suppliers for things such as electronic bill pay, VIN lookups or informative dashboards. Our IMS system is the backbone, doing the number crunching and work needed for an MGA or program administrator. Then, we bolt on all sorts of applications that an MGA wants.
One of the challenges that I see is for new hires starting a job without being in an office environment. I know for the new folks that joined MGA Systems during the pandemic, it was more daunting to learn the systems, go through our training bootcamp, be mentored by staff and embrace the corporate culture while working remotely. I think that our customers experienced the same thing. Onboarding their new hires had to be handled much differently than when all employees were in the office together.
MGA Systems has been lucky during the pandemic with our ability to continue to be productive and serve our clients while not working in the corporate offices. I do think it’s more challenging to keep the work/life balance when you’re working from home. It’s difficult to separate between work and home because you don’t have a commute to transition from one environment to the other. You never seem to get away from your workspace in your home.
We have been impressed with our customers’ creativity during COVID-19. Naturally, any disruption of this scale creates churn in business. I believe that our customers are true entrepreneurs and are figuring out how to thrive in this difficult time.
I agree, I think the MGAs we work with have been very resilient. Some of our clients write programs that suffered during the pandemic, such as restaurants and entertainment venues. It was an opportunity for these MGAs to pivot to other, perhaps similar, markets for generating new business. Also, it was a time to reconsider how to reduce expenses. Some of our clients were able to eliminate travel, entertainment and even downsizing office space.
We believe that specialty insurance is the way of the future. The general agent has a breadth of knowledge, but not necessarily depth in any vertical. The name of the game now is to specialize. The program administrator that knows all about tow trucks now has a program designed for that specialty. And technology makes it possible to work with agents as a distribution force and customize the applications that support the nuances of the MGA business model.
Technology will also influence the post-COVID world as we may continue supporting the remote work force. None of us are sure when we’ll get all our employees back to our offices or if we’ll end up with a hybrid model of some employees working in the office and others continuing remotely.
Big data of course is important to MGAs. Ultimately, insurance is about data and algorithms. More access to data is always better than less, especially as actuarial and underwriting decisions are made, and when an MGA is evaluating which markets to enter.
Our integration philosophy is huge. Tight systems integration is really a must-have in this niche. We think it’s important to deliver best-in-breed products to our customers by integrating with well-respected partners.
We respond to what our customers need and ask for versus creating an expensive solution looking for a problem to solve. We trust our customers, who are closest to the business, to come up with good ideas, and then we implement them. As Paul mentioned, we stick to our core competency of insurance processing for MGAs and program administrators, but we leverage integrations with other companies. We may integrate with an AI product or credit score application – it doesn’t matter to MGA Systems. We just want to unite all the pieces that a successful MGA needs to run their business because we want to do what makes sense for our customers.
Right, we stay close to our customers as they grow their businesses. We would never dream about using our products in ways they are using them in their organizations. Our customers use our products every day so they’re the real experts. We listen to our customers.
As you see, our leaders at MGA Systems are intimately involved in the MGA market niche. When you are considering partnering with a vendor that can help meet your goals, please give us a call at (877) 790‑1114 or contact us here to find out how IMS and MGA Systems can provide you with the right solution for your needs.