MGAs: A Leader’s Perspective – Colin Thompson, Nexus Underwriting Management Ltd
Following on from last year’s successful articles, please see our latest MGA leadership interview.
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: Colin Thompson, Founder & Group Chief Executive Officer, Nexus Underwriting Management Ltd
- Colin was Professional Lines Manager with Axis Specialty Europe Ltd prior to founding the Nexus Group.
- Starting out his career with a BA (Hons) Law Degree, he moved into insurance where he developed his wide knowledge of the industry through varying responsibilities, including Executive Protection Unit Manager and Transaction Liability Manager, for Chubb Insurance Company of Europe SA and as D&O Line Manager at CNA Insurance Company (Europe) Ltd.
Q1. What attracted you to the MGA market?
I started out as a graduate trainee at Guardian Royal Exchange Assurance in 1995, moving up through the ranks to hold senior management positions at other leading specialist insurance brands, before co-founding Nexus in October 2008.
I wanted to create a Managing General Agency (MGA) with a dynamic and unique growth path into Specialty Lines insurance for insurers. We quickly realised there was a gap in the market for a specialty MGA that could process and place business in a more streamlined, cost-effective way.
Q2. How does working in an MGA environment differ from any other type of Insurance business?
An MGA occupies a unique place in the (re)insurance industry, it is an insurance agency or business entity which is granted authority by an insurance carrier /underwriter to administer insurance programs and negotiate contracts on its behalf. The MGA acts as an intermediary between carriers, brokers/agents and/or insureds.
Q3. What does it take to grow a profitable and sustainable MGA business?
A lot of hard work and a proactive approach! We have always had a keen eye for identifying market opportunities and moving quickly to capitalise on them.
Other contributory factors are also involved of course. Diversity of lines of business and territories is important.
We also recognise the need to lead and innovate with technology. We have developed pioneering platforms that facilitate efficient online quoting for the specialist insurance market, further increasing the speed and volume of business that can be processed and underwritten. By constantly innovating and leading with technology within a market that is still lagging behind in the global digitisation trend, you have to do things differently to stand apart.
Q4. Knowing what you know now, is there anything you would have done differently?
If I knew what I now know then I doubt I would have started an MGA!
Q5. What do you see as the biggest opportunity in the market?
The biggest opportunity as I see it is the ability to be able to deliver a better service.
As business risk becomes more complex and volatile, we continue to embrace an entrepreneurial spirit to ensure that our customers benefit from the most innovative and dynamic solutions in specialty insurance.
With a keen focus on establishing strong relationships, our teams consistently endeavour to deliver a superior client experience and products of real value, and build up a reputation for providing flexible, original and meticulous underwriting and an unrivalled level of security.
Q6. What is the greatest challenge?
To continue making claims settlement a priority.
Having a best in class in-house claims function allows Nexus to provide long-term continuity and top-tier service levels to brokers and their clients.
Q7. How has the MGA market changed in recent years?
Competition has become much stiffer and many more players have become involved, particularly on the international stage. MGA’s have become professionalised and a central part of the insurance market.
Q8. How do you see the MGA landscape changing in the future?
Becoming stronger. In the UK there are over 4,000 Lloyd’s coverholders and we think it is a heavily fragmented market which provides a lot of opportunities in the MGA space.
In the USA the MGA market is much more mature with several $1+ billion GWP players. There are a number of multi-product MGAs (which often have associated captives/risk bearing vehicles), Third Party Authorities and brokers. In Asia the market is much smaller and less mature with increased regulatory reluctance. With significant surplus market capital still a prevailing feature of the market it is arguable that the MGA model of renting insurer balance sheets will only continue to grow.
Q9. What part will technology play in the future development of MGAs?
A very big part, as it will for the future of insurance worldwide.
We recognise the need to lead and innovate with technology. Our claims team, for example, have developed a claims system which produces comprehensive market client reports and bordereaux with integrated workflow, document management and payment processes. We are proud to be completely paper free with our end-to-end solution, while clients benefit from a professional, streamlined and highly efficient service.
Across the Group, we have also developed pioneering platforms that facilitate efficient online quoting for the specialist products, further increasing the speed and volume of business that can be processed and underwritten.
Q10. From a recruitment point of view, what do you feel is the attraction of working in an MGA?
Obviously each company is different. I often get asked what the special ingredient of Nexus is, and the answer is our people. They are the ones that make this business. We have a team who work hard, sometimes play hard, and whom we support through training and rewarding success. We work hard to train new talent in-house, blending senior experienced individuals with the next generation of experts, while also inviting members of the team to enrol in young leadership schemes and CII training as well as offering superb mentoring.
For MGAs in general, you will get an excellent perspective of insurance from both sides of the fence as it were, broking and underwriting.
Q11. What traits are needed for those who work in an MGA to be successful?
Patience, perseverance, agility and the ability to communicate to every single level of your business.
Q12. What advice would you give to anyone looking to start an MGA?
Do your research. And then do it again. Not every MGA is going to have the meteoritic rise that we have been able to enjoy.
Strategise at every stage of your growth. Don’t be afraid to change the plan if it isn’t bringing you the results you were hoping for.
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.