MGAs: A Leader’s Perspective – Scott Brown, Accelerate Underwriting
The MGA market continues to grow in the ever competitive and changing insurance landscape.
I have recently interviewed the CEO’s and leaders of several MGA’s to discuss their views on various topics relating to the MGA market.
Today’s interview is with: Scott Brown, Founder & Managing Director of Accelerate Underwriting
- Scott has 25 years experience in the industry
- Has worked within insurers, brokers and MGA’s
- Latterly was MD of Fusion Insurance and CEO of Towergate’s Commercial Underwriting Division
Q 1 What attracted you to the MGA market?
Kind of got into it by default – I fell into it. When I left the brokerage I was at in Scotland, I wanted a new challenge and I approached some people I knew in an MGA and they offered me a job.
Q 2 How does it differ?
Working in an MGA is different to working in an insurance company as you are 100% responsible for the results. There is nowhere to hide. In a large insurance corporation you can hide, whereas in an MGA that is not possible and it brings with it a new set of pressures. People scrutinise you more and there is more accountability.
Q 3 What does it take to grow a profitable and sustainable MGA?
You have to bring something different.
Writing standard commercial business is more of a focus for insurance companies than MGAs. MGAs should be more focused on non-standard and niche opportunities.
- This verifies in my head that Accelerate are doing the right thing. We could have gone down a more standard route but I knew that going forward we had to do something different.
- Standard has had its day, non-standard and niche is where the long term sustainability is.
- The structure of the businesses is important – if you can, it should be structured so you own it. I think that having the people that run the MGA owning a large stake in the company makes them embrace the accountability – if you own it you live and breathe it! I know that this helps me focus my mind on the business.
- Technology and data being right is very important. It is imperative you can show people, particularly capacity, that you are doing well.
- Product delivery is important so investing in a slick distribution system, like AcceleRATER, was important to us.
Q 4 Knowing what you know now, is there anything you would have done differently?
I would have got more involved in the IT build in the early days. Instead, I concentrated on the sexier things like making deals.
Q 5 What would you say is the greatest challenge for MGAs?
Writing profitable books of business in a challenging market place while keeping your capacity. Insurance companies are getting tighter and becoming more savvy on who is doing what. This is why it is important that data provided is clear so they know what kind of business you are doing. In my role 10 years ago it was easier to get capacity than what it is now.
Q 6 What is the future of the MGA market?
The future is in niche and non-standard business. One of the problems we have faced is that when you are talking to capacity providers you are speaking about business that they wouldn’t normally do which we have seen to be a challenge. Getting your pitch across clearly is key.
Q 7 Is there an appetite from the larger insurers to provide capacity?
In general yes, they go through phases where they want to grow or want to stay still. The people that we have picked to work with are in it for the long haul and they are people that we have known for a long time, which works for us. We are of a size now where we can go out and ask if they want to get involved as we have the premium to back us up and they can see the profitability of our book, so our pitch has changed
Q 8 How has the MGA market changed in recent years?
It has moved from standard to niche and you can see that technology is now playing a big part. It has helped looking at how the personal lines market developed in relation to product delivery and IT, which are things that we have tried to bring in to the non standard commercial business. The operational efficiency of it has been important.
Q 9 How is technology playing a part in the future of MGAs?
Technology is playing a part in the future of MGAs in 2 ways. Technology developments in the customer base can be seen as an opportunity – the use of drones is an example of this, there is an opportunity for product development. Technology developments in the business have meant that we have been able to produce slick and accurate data for capacity providers.
Q 10 What impact has GDPR had on the business?
We have taken a hard line approach to GDPR and have followed the guidelines to the letter. This has produced challenges – for us this has been particularly in relation to account statements and how we deliver them to brokers. A lot of this though is common sense.
Q 11 From a recruitment point of view, what do you feel is the attraction of working in an MGA?
People that are doers rather than just talkers work well in an MGA. There are fewer hiding places, so if you talk a great game you are better off working in an insurance company but if you want to get your head down and deliver, MGAs are for you. For the right person who can excel in this environment – they will get a lot more job satisfaction working for an MGA.
Q 12 What traits are needed for those who work in an MGA to be successful?
Doers and people that have a bit of humility. If they can get on with it and don’t need to shout about it, they are ideal.
Q 13 What advice would you give to someone who wants to start an MGA?
Don’t underestimate the amount of time you have to give it and the amount of stress it will cause you. Make sure that you have the right investors so that if you hit speed-bumps, which you will inevitably do, they will back you rather than just question you. This is key. There are high rewards if you do well. You need to be nimble and be able to react to anything that doesn’t quite go to plan.
Right International are specialist Headhunters to the MGA/Insurance market and have extensive experience of supporting start up MGA’s, recruiting key individuals as part of the initial senior management team. We also have a successful track record of sourcing the top talent for market leading MGA’s. If you are looking to fill a key role, please contact me to discuss how RI can help.
If you would like to be involved in future articles, please let me know and I would welcome any feedback. Look out for the next interview coming soon!
All the best,
Founder & MD
Right International Insurance Headhunters
At Right International our specialty is sourcing the top achievers for the Insurance Market.