2015 Rate Your MGA - Special Risk Insurance Managers Ltd.

Transcription

FEATURES
COVER STORY: BROKERS ON MGAs
We asked brokers around the country to
share what they love – and what they don’t
– about MGAs
24
www.insurancebusiness.ca
FAST UNDERWRITING and claims responsiveness are what brokers are looking for in a
managing general agency, according to
Insurance Business Canada’s annual Brokers
on MGAs survey.
Hundreds of brokers across the country
responded to rate their MGAs on seven
criteria:
MGA reputation
Premium pricing
Range of carriers
Underwriting responsiveness/turnaround
time
Claims responsiveness/turnaround time
Automation
Marketing support
Brokers ranked each category’s importance
on a scale from 1 (unimportant) to 10 (vital).
They also rated their MGAs’ performance in
each category on a scale from 1 (poor) to 10
(excellent).
So how did things shake out? Brokers were
most concerned about underwriting and
claims responsiveness; those two categories
were their top priorities by a significant
margin. However, MGAs’ performance in those
areas doesn’t seem to be living up to broker
expectations; MGAs overall rated just 7.52 out
of 10 in underwriting responsiveness and 7.45
in claims responsiveness.
In fact, brokers seem to think MGAs could
stand to improve in just about every area.
MGAs only broke an 8 in one category –
reputation – and didn’t even rate an aggregate
7 out of 10 in automation or marketing
support.
The biggest issue seems to be a lack of
responsiveness. Over and over, survey
respondents complained that their MGAs
responded slowly to inquiries, didn’t answer
emails in a timely fashion or just plain didn’t
communicate well.
“We spend a lot of time following up on
terms and endorsements, and it would be nice
to have an MGA communicating effectively
so that we’re not left unsure of what is
BROKER PRIORITIES
We asked brokers to rank the following aspects of the MGA relationship on a scale from 1
(unimportant) to 10 (vital). These were their priorities:
Underwriting
responsiveness/
turnaround time
Claims responsiveness/
turnaround time
9.41
9.14
8.76
8.68
8.09
7.39
7.35
MGA reputation
Premium pricing
Range of carriers
offered
Automation
Marketing support
0
2
4
6
8
10
AVERAGE MGA PERFORMANCE
Our survey respondents also rated their own MGAs’ performance on a scale of 1 (poor) to 10
(excellent). Here’s how MGAs performed overall:
8.20
7.90
7.78
7.52
7.45
6.86
6.75
MGA reputation
Premium pricing
Range of carriers
offered
Underwriting
responsiveness/
turnaround time
Claims responsiveness/
turnaround time
Automation
Marketing support
0
2
happening during the marketing process,”
one respondent complained.
That’s not to say there were no
standouts, however. Overall, MGAs
generally performed better this year than
they did on 2014’s survey. And some MGAs
truly stood out; in each category, we’ve
singled out the ‘five-star MGAs’ that got
4
6
8
10
excellent ratings from brokers. Only MGAs
that received consistently excellent ratings
from brokers earned the designation; in
one category (automation), only two MGAs
achieved five-star status. And only one
company (Cambrian Special Risks)
achieved five-star status across every
category.
25
FEATURES
it at an 8 or a 9. Not a single respondent rated
its importance below a 5.
Unfortunately, brokers didn’t feel MGAs
were quite living up to expectations here. While
MGAs scored a relatively respectable 7.52 out
of 10 in the category, that’s still only the thirdhighest aggregate score. And 14% of MGAs
scored a 5 or lower in the category.
Brokers complained that even those MGAs
that performed well in other areas had problems
with underwriting responsiveness.
“Overall I feel they do a good job, but
depending on the underwriting workload,
sometimes their responses to inquiries and
turnaround are not the best,” said one broker.
Another complained that his MGA had trouble
“maintaining sufficient underwriting support.”
Still, it wasn’t all bad news. Eight MGAs
wowed brokers in this category, receiving
consistently excellent scores.
“They have underwriters that are actually
willing to underwrite and not try to fit only
square pegs in square holes,” raved one broker
about five-star MGA Beacon Underwriting.
UNDERWRITING
RESPONSIVENESS
Importance to brokers: 1st
Average MGA performance: 3rd
FIVE-STAR MGAs
ABEX Affiliated Brokers
Anderson McTague & Associates
Angus Miller Insurance
Beacon Underwriting
Cambrian Special Risks
Chutter Underwriting
Special Risk Insurance Managers
SUM Insurance
Average MGA performance: 7.52
“Sometimes
their responses
to inquiries and
turnaround are not
the best”
Brokers attached the most importance to
underwriting responsiveness and turnaround
time, rating it at an average of 9.41 out of 10.
The agreement among brokers on the
importance of this category was overwhelming;
nearly 63% of survey respondents rated it at a
10 – absolutely vital – and another third rated
HAS PERFORMANCE IMPROVED SINCE LAST YEAR?
In general, it appears that MGAs have stepped up their game since last year’s survey, achieving higher results in
almost every category
10
9
8
7
6
5
Underwriting
Claims
responsiveness/ responsiveness/
turnaround time turnaround time
MGA
reputation
Premium
pricing
2014
26
2015
Range of
carriers offered
Automation
Marketing
support
CLAIMS
RESPONSIVENESS
Importance to brokers: 2nd
Average MGA performance: 4th
FIVE-STAR MGAs
Beacon Underwriting
ENCON
Claims responsiveness was nearly as important
to brokers as underwriting, scoring an average
of 9.14 out of 10. More than 90% of survey
respondents rated claims responsiveness at
an 8, 9 or 10 – 54% rated it at a 10 – and no
one felt it was unimportant. In fact, only one
broker rated claims responsiveness below a 5
in importance.
Again, as a whole, MGAs didn’t exactly
blow anyone out of the water with their
performance, but they got a respectable
aggregate score of 7.45. Brokers noted
problems with turnaround time or lack of
communication on the part of several MGAs
when it came to claims.
“[They need] better claims service and
the ability to respond quickly,” said one
broker.
Another complained that his MGA needed
to “create their own internal claim
department rather than using claim
companies.”
Still, several MGAs did impress their
brokers in this area, and eight did well
enough to achieve five-star status.
FEATURES
MGA REPUTATION
PREMIUM PRICING
Importance to brokers: 2nd
Importance to brokers: 4th
Average MGA performance: 1st
Average MGA performance: 2nd
FIVE-STAR MGAs
FIVE-STAR MGAs
A.M. Fredericks Underwriting Management
April Canada
Beacon
Burns & Wilcox
Can-Sure Underwriting
ENCON
Premier Canada
South Western Group
SUM Insurance
Totten Insurance Group
Beacon Underwriting
ENCON
SUM Insurance
MGAs notched their best performance in
this category, averaging 8.20 out of 10. And
while MGAs’ reputation wasn’t at the top of
brokers’ list of priorities, they still felt it was
important, rating it at 8.76 out of 10, making
it the third priority behind underwriting and
claims responsiveness.
Brokers clearly recognized that a good
reputation means a lot for an MGA; 60% of
survey respondents rated the importance of
an MGA’s reputation at a 9 or 10, and no one
said it was unimportant.
And MGAs performed quite well here –
76% of respondents gave them an 8, 9 or 10.
What’s more, a whopping 18 MGAs achieved
five-star status, more than in any other
category.
28
MGAs also did fairly well when it came to
premium pricing, scoring 7.90 out of 10. That
still fell below broker expectations, however;
brokers rated the category’s importance at an
average of 8.68 out of 10. More than 85% of
survey respondents rated premium pricing at
an 8, 9 or 10, and nearly a third rated it at a
full 10.
Just 6.7% of survey respondents rated their
MGA at a 5 or lower when it came to premium
pricing, and 10 MGAs did well enough to
achieve five-star status.
“I’m very pleased with the service and
abilities of the staff and management,” said one
broker of five-star MGA Anderson McTague &
Associates. “They offer a very well-priced
product.”
“I’m very pleased
with the service and
abilities of the staff
and management”
EXPECTATION VERSUS PERFORMANCE
So how did brokers’ evaluations of MGAs’ performance measure up to what brokers said was most
important to them? Overall, it seems MGAs are still falling a bit short, particularly in some key areas
Underwriting
responsiveness/
turnaround time
9.41
7.52
Claims
responsiveness/
turnaround time
9.14
7.45
8.76
8.20
MGA reputation
Premium pricing
8.68
7.90
Range of carriers
offered
8.09
7.78
Automation
7.39
6.86
Marketing support
6.75
0
2
4
Importance to brokers
7.35
6
MGA performance
8
10
FEATURES
RANGE OF CARRIERS
Average MGA performance: 3rd
FIVE-STAR MGAs
Beacon
Burns & Wilcox
While having access to a range of carriers
wasn’t the most important factor to brokers
when looking for an MGA, they still assigned
it a relatively high priority, rating it at an
average of 8.09 out of 10.
In fact, more than 41% of brokers rated
this category at a 9 or 10 – effectively making
the range of carriers available a vital
consideration when choosing an MGA. Only
a single survey respondent said the category
was completely unimportant.
According to brokers, MGAs are doing all
right when it comes to this category – but
just all right. MGAs averaged 7.78 out of 10
when it came to the range of carriers they
offered – not a bad score, but one that shows
definite room for improvement.
Fewer carriers means fewer products
available to brokers – and brokers are
painfully aware of it. Again and again, our
survey respondents said their MGAs don’t
give them access to enough products, or
enough information about those products.
Still, it’s not all bad news for MGAs on
this front. More than 55% of respondents
rated their MGAs at an 8, 9 or 10 in the
category, and eight MGAs fared well enough
to earn five-star status.
30
ROOM FOR IMPROVEMENT
We asked brokers to tell us how their MGAs could
improve. Here’s what they had to say:
“More office visits to explain
products”
“Faster turnaround on queries for
customers”
“Some lines still have a very
small capacity, and it is surprising
to us considering the class
of business is good standard
business”
“Quicker response times and a
wider range of targets”
“They need to understand that
they are an MGA, not an insurer”
“Offer a contingent bonus
payment plan”
“Turnaround is becoming a
problem for both renewals and
quotes”
“Performance is not the problem.
Generally, the split in commission
and policy fees are”
“Sometimes there’s more delay
in responding to emails and new
quotes than usual”
AUTOMATION
FIVE-STAR MGAs
MGAs’ automation capabilities weren’t nearly
as important to brokers as things like
underwriting responsiveness and turnaround
time. Still, brokers felt automation was
relatively important, rating it at an average
of 7.39 out of 10. That number might not
seem to reflect a particularly high priority,
but it doesn’t tell the whole story. More
than half of the brokers surveyed rated
automation’s importance at an 8, 9 or 10 –
and 18% of survey respondents said it was
vital. Just 7.8% of respondents rated the
category below a 5 in importance, and only
four brokers said it wasn’t important at all.
Unfortunately, MGAs did not fare
particularly well in this category. Brokers
rated their MGAs’ automation capabilities
at just 6.86 out of 10 – MGAs’ second-lowest
overall score. And more than 21% of survey
respondents rated their MGAs’ performance
at a 5 or below.
Even more damning, just two MGAs
performed well enough to earn five-star
status – Angus Miller Insurance, which
achieved five-star status in six out of seven
categories, and Cambrian Special Risks,
which swept the survey with five stars in
every category.
“Broker relations could be better dealt
with. The underwriters are pleasant
enough, but the relationship isn’t taken into
consideration”
FEATURES
MARKETING SUPPORT
FIVE-STAR MGAs
“It would be nice to have an MGA
communicating effectively so that we’re not
left unsure of what is happening”
Marketing support was the least important
category to brokers, who gave it an average
rating of 7.35 out of 10.
However, more than 51% of survey
respondents rated the importance of
marketing support at an 8, 9 or 10, and nearly
20% rated its importance at 10. Only 8% of
brokers rated marketing support below a 5,
and just three survey respondents said it
wasn’t important at all.
That’s why it’s a little disconcerting to see
subpar performance from MGAs on that
front. Brokers rated their MGAs at an average
of just 6.75 out of 10. Fewer survey
respondents rated their MGAs at a 10 in this
category than in any other, and just three
MGAs did well enough overall to earn fivestar status.
WWW.INSURANCEBUSINESS.CA
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ISSUE 1.1
30
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ADRIAN HUMPHREYS
LLOYD’S CANADIAN
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UNDERWRITING AGENCIES
THE GENUINE ALTERNATIVE
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32
23/10/2013 10:56:45 AM
UPFRONT
MGA UPDATE
Partnership key to
‘staying ahead’
A top MGA has partnered with an online brokerage,
believing it’s the next step in reaching new clients
well with its role as a niche underwriter, as
Bullfrog’s online platform expands offerings to
clients who wouldn’t receive service otherwise.
“We’ve seen a number of successes that
don’t fit the traditional rating matrix, but we’ve
been able to work with Bullfrog on accounts
that are outside the box,” McDermott says.
Bullfrog also benefits from the partnership
with South Western, which expands the
brokerage’s reach through the underwriter’s
backers.
“Most business owners
and professionals just
don’t have time to meet
during work hours”
Even though online brokerage Bullfrog
Insurance just arrived on the scene earlier
this year, it has already partnered with
such reputable names as Aviva Canada and
Northbridge Insurance. Now the brokerage
can add MGA South Western Group to the list.
The specialty underwriter decided to collaborate with Bullfrog because of its innovative
business model, which the brokerage claims
NEWS BRIEFS
makes it the sole online-only provider of small
business and commercial coverage in Canada.
“Most business owners and professionals
just don’t have time to meet during work hours,
and as a result, a lot of online transactions are
made between 8:00 and 10:00 at night,” says
Michael McDermott, director of underwriting
for South Western Group.
South Western believes this flexibility aligns
Partnership yields
strategic broker
solutions
First Insurance Funding of
Canada, a provider of payment solutions for
the insurance industry, has partnered with
MGA and wholesaler Evolution Insurance
to introduce Evolution Insurance to its First
Connect product. This solution allows the
insurer to provide commercial brokers with
convenient payment options such as pay in
full, easy monthly payments and credit cards
with competitive rates. The alliance benefits
brokers by helping them increase retention,
convert business more seamlessly and
optimize cash flow.
14
“South Western Group brought Lloyd’s to
the table,” says Bullfrog CEO and president
Sam Natur. “Lloyd’s is keen on this partnership
because they’re a global player in markets
worldwide, and they’re learning that this
is a fantastic way to access the self-serve
demographic.”
The Guarantee Company of North America
also recently partnered with the insurer, hoping
it could provide a “faster and simpler way” for
companies to obtain business insurance that is
suited to their particular needs.
“Small business owners today are part of a
very competitive marketplace and struggle to
find time to get the insurance they need without
being tied up in a rather consuming process,”
said Glenn Woodard, national vice president of
corporate insurance for The Guarantee.
South Western
Group offers
specialty products
South Western Group has
launched two new specialty coverages. Its
security services product was designed for
the growing security business market, and
includes failure to perform and no general
aggregate, along with optional coverages
such as a privacy breach event expenses
coverage rider. Its tattoo & body piercing,
permanent makeup and tattoo removal
product provides liability coverage for tattoo
artists, body piercers and pigment lightening removal specialists, with competitive
premiums and limits up to $5 million.
Q&A
Mark Woodall
The growing presence
of MGAs in Canada
President and CEO
SPECIAL RISK
INSURANCE
MANAGERS
Fast fact
Alongside Grant
Kimball of Angus
Miller Insurance,
Woodall is working on
establishing Canada’s
first MGA association
How big of a force are MGAs in Canada?
There are a lot fewer insurers today than there were
10 years ago, and a lot more MGAs. MGAs are writing
over $1 billion of business now in Canada, and growing
significantly. The majority of us are seeing double-digit
growth on a monthly basis.
We’re seeing are a lot of mainstream insurers using
MGAs because of stagnant growth through the organic
market. They’re looking at different ways of increasing
their growth. If they appoint a number of new brokers,
their costs in training and development of a retail broker
are open-ended. If they use an MGA for distribution of
their products, their acquisition costs are fixed at the
commission levels. So it gives a lot of the insurers cost
certainty for acquisition of new business.
Many of the MGAs also have more experience at
the underwriting level than a lot of the companies
have, especially in specific lines of business. I’ve been
approached by a typical insurer that focuses mainly on
property, but is looking to balance their portfolio with
liability products, but doesn’t have the in-house expertise
to write it. So they’ve approached us to write it on their
behalf … utilizing our level of expertise.
What are the key misconceptions about MGAs?
For the longest time, we were the markets that the
mainstream markets wouldn’t touch because it was
perceived that our business was all of the less-thandesirable business. Many of the MGA markets now are
distributing mainstream products.
MGA develops
commercial crime
insurance
ENCON has launched two crime
insurance solutions to help protect organizations against fraud or theft. The commercial
crime insurance stand-alone policy is
available for all businesses, including retail,
restaurants, government agencies, media
and nonprofit organizations. The commercial
crime insurance endorsement supplements
existing D&O coverage, and includes blanket
coverage for all employees, coverage for
worker theft, an expanded designation of
‘employee’ and the option to add computer
fraud or funds transfer fraud coverage.
The whole perception of what an MGA is is rapidly
changing in today’s marketplace. What we’re seeing is the
insurers coming to us. We’ve been approached by more
insurers in the first eight months of this year than we
have probably collectively in the past five years.
Can you update us on the progress in
establishing Canada’s MGA association?
We’re well off the ground! There are only 93 MGAs in
Canada … we’re hoping by year-end, we’ll have 20 to 25
MGAs as part of our association. We’ve got a number
signed up already.
What we’re doing here is creating a division within [the
American Association of Managing General Agents]. If
we got 25 to 30 MGAs to commit to membership in the
first year, it still doesn’t give us enough money in dues to
be able to really establish our own organization. So what
we’ve done is we’ve become part of the AAMGA, but we
have our own Canadian distinction and flavour. We’re
going to be part of the AAMGA meetings, but we’ll have
our own meeting dealing strictly with Canadian issues
and working with the Canadian group.
In a recent meeting we were at with the AAMGA, a
number of the Canadian MGAs were able to establish
relationships and are now doing business with some
of the US members. It’s turning out to be financially
rewarding. A lot of the problems that we’re experiencing
here, they’ve experienced previously. And even though
we’re in a different country, they’re able to provide us a
great deal of benefit and assistance going forward.
Totten CEO tapped
by Travelers
Canada
After Brigid Murphy
announced she was stepping down as
Travelers Canada’s CEO, the insurance giant
made several executive moves, including
poaching Heather Masterson from Totten
Insurance Group. Masterson, who had been
serving as president and CEO of the MGA,
now acts as COO of Travelers Canada. “I am
looking forward to working with Heather, who
brings substantial experience and strong
relationships in the Canadian brokerage
community,” said newly appointed Travelers
CEO Duane Sanders.
MGA creates
renewable energy
program
SUM Insurance has developed
a renewable energy insurance program that
leverages its underwriters’ experience to
cover renewable energy installations. The
monoline solution addresses such needs
as transit, installation and operation; target
markets include onshore and offshore
wind, photovoltaic cells and active solar,
and marine renewables, as well as other
options such as marine and/or transit or
construction ‘all risks.’ Premiums start at
$5,000, and the ‘all risks’ blanket cover
ensures there are no gaps in protection.
15
We truly appreciate you noticing
our GREAT service over the years!
It’s within the heart of SRIM’s operations to provide our clients
and partners the highest in support and service quality.
Thank you again for all your hard work on
my submission for the fitness studio. It
was above and beyond my expectations.
Your patience was truly appreciated!
I have been in the industry for 15 years, commercial
for just over 10, and dealing with SRIM for most of
that time. Most notably over the last few days, but
also over the last few months – the level of service I
have received from SRIM has been second to none.
The turn around times on quotes is amazing, the
terms received are competitive, and the expertise is
appreciated. KUDOS TO YOUR TEAM!!
Keep up the great work!
Edmonton, AB
Wow, wish every company was as efficient
as you!
Regina, SK
Williams Lake, BC
WE’RE THERE… to support our brokers!
If your insured can own it, make it, play it, or think it… we can insure it!
You guys are awesome and you have a
happy client.
So love working with Miranda and Sherri and
SRIM!!!!!
Kamloops, BC
Winnipeg, MB
Well thank you Angie. It was funny that 1
minute after I sent you the email the online
sent the amended policy, I thought “How
much quicker can you get without reading
my mind?”…
You are way too good at your job, I don’t have
enough thank yous for what you have
accomplished for me at quote time. Thank you 
Thank you 
WE’RE THERE… for whatever “IT” might be!
Grande Prairie, AB
Calgary, AB
Thanks very much for your quick response on this –
the insured has expressed his appreciation as well.
Thanks for the quick turnaround.
It’s appreciated.
[email protected]
Winnipeg, MB
www.srim.ca
Mississauga, ON
[email protected]
Langley, BC
800.993.6388
Vancouver, BC
800.941.2755
Champion, AB
844.497.3997
www.srim.ca
Winnipeg, MB
866.391.2925
Mark Woodall, B.A., AIIC, CRM
President & CEO
[email protected]
Whitby, ON
888.519.3442
Tom Willie, CAIB, CIP
Director & Chief Underwriting Officer
[email protected]
Special Risk Insurance Managers Ltd. is proud to be your independently owned and operated
Canadian MGA, working with you on the ever-changing needs of your clients.

2015 Rate Your MGA - Special Risk Insurance Managers Ltd.

Transcription

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