Modern Insurance Magazine Issue 60

INSURTECH
MGA Resilience
in the Face of
Agile Start-ups
Digital transformation continues to rock the boat in the
insurance industry, with technology increasingly acting as
the new middleman between insurers and clients. In 2021,
investment in insurtech start-ups grew by a staggering 87%,
and whilst 2022 proved a tough year for some insurtechs (and
indeed the wider tech industry as a whole), the overall trajectory
is only headed in one direction. So, with freshly minted start-ups
in the sector among the main drivers of investment, how can
large scale MGAs stay resilient?
Tim Hardcastle,
CEO and Co-Founder at INSTANDA
To remain ahead of the curve,
traditional MGA insurance providers
must invest in digitisation to create
the agility and flexibility that mirrors
the methodologies of these newer
intermediaries. At the same time,
they must put their advantages (data,
human resources, and brand reputation
to name but a few) to good use.
Relevant products must be created for
audiences demanding modern end-toend
technological experiences.
With this in mind, how can start-ups
revolutionise the insurance industry
with agile solutions?
Agile start-ups and insurtech
As tech-driven innovation reshapes
the insurance industry, investors are
rapidly taking note, with the number of
insurtech start-ups skyrocketing. What
are the key factors driving growth?
Insurtech has enabled the insurance
industry to step up its user experience,
offering services which are far
superior to traditional providers.
The introduction of technology like
smartphone apps, online policy
handling and claims processing tools
means that customers and brokers
can access their insurance policy
information with ease. Embedded
platforms also enable insurers to
seamlessly merge with technology
in other sectors, meaning insurance
no longer needs to be treated as a
standalone proposition.
The impact of Insurtech on mature
MGAs
New solutions offered by insurtech
intermediaries provide complete endto-end
services - negating the value of
some prior MGA-carrier relationships
and often significantly decreasing the
total cost of ownership for carriers
through technology.
Therefore, emerging start-ups are
challenging some more established
MGAs by offering newer, slicker product
offerings and customer experiences.
Where insurtechs have chosen the MGA
structure, many have been founded by
non-insurance folks who are bringing
tech and data expertise from other
industries to the table. Whilst this has
its potential drawbacks, it has certainly
given traditional MGAs a different
competitive landscape to consider.
Positive disruption
While the introduction of insurtech
intermediaries is certainly disrupting
the industry, it isn’t all doom and
gloom for the traditional players. This
shift is pushing existing MGAs forward
by driving the need to embrace
technology, and when looking at the
bigger picture, it could provide a
multitude of benefits across the value
chain.
Customers and brokers can receive
a better all-round experience and
access to new, innovative products and
services. Carriers will be able to access
data that they might not have had at
their fingertips otherwise, thus giving
a better understanding of how their
capital is deployed.
Flexibility in large scale MGAs
Large scale MGAs can achieve digital
transformation through numerous
avenues - perhaps the most influential
being the replacement of legacy
systems to revolutionise the approach
to product creation and policy
management. By digitising core
services through the use of automation,
cloud technology and data analysis,
existing MGAs can bolster their
appeal with carriers, brokers and endcustomers
alike.
Speed-to-market solutions like
INSTANDA allow for adaptable
test-and-learn environments which
empower MGAs to get out ‘lightweight’
versions of new products quickly and
easily. MGAs can then assess product
performance before enhancing and
amending them in line with market
demand. The ability to create, build and
implement complex insurance products
in weeks or months - as opposed to
years - can help alleviate some of the
pressure caused by an influx of startups.
INSTANDA’s no-code technology
(hosted via Microsoft Azure) also
enables MGAs to say goodbye to
the need for never-ending cycles
of ‘change requests’ with their tech
partner, drastically lowering their total
cost of ownership.
82 | MODERN INSURANCE