U.K. MGAs Seek Greater Role in Claims Process: MGAA Matters Survey

Managing general agents are keen to be more involved in the claims process because they view claims as a core competence with an intrinsic link to underwriting, according to the latest MGAA Matters Survey.*

The fourth quarterly MGAA Matters Survey, which is sponsored by the U.K.’s Managing General Agents Association and MGA start-up specialists Castel Underwriting Agencies, looked at the current role of MGAs in the claims process and companies’ future plans to develop their claims functions and processes.

The survey, which in October interviewed 34 full members of the MGAA, also highlighted issues the sector faces in gaining more prominence and participation in the claims process.

The survey revealed that MGAs are clear about the need to have a role in claims. Nearly 53 percent of those surveyed said claims are integral to underwriting so they need to be more involved and close to 24 percent “saw themselves as enablers, ensuring the delivery of appropriate outcomes.”

MGAs have the foundations in place to facilitate greater claims involvement, the survey found, noting that 40 percent of respondents have a dedicated claims team or a nominated individual, while 30 percent outsource the claims function to a third party or carrier nominated supplier.

One-third of respondents revealed that they plan to grow strategically or to support the expansion of their businesses over the next three years.

Relations with carriers will also be a focus for over 30 percent, who said they will be working more closely with their capacity providers to help develop the process.

In order for MGAs to have a more prominent role in claims, several specific factors will have to be addressed, the survey indicated. Survey respondents highlighted the need for the following key factors:

• More coordination between all parties in the claims process (44 percent),
• Greater access to claims data (34 percent),
• Better use of technology (31 percent)
• Sharing of claims best practice (28 percent).
• Greater investment in acquiring and developing in-house claims talent (25 percent).

Despite the increased regulatory scrutiny and outcomes from the U.K. Financial Conduct Authority’s thematic review into claims handling by small- and medium-sized enterprises, the majority of MGAs were confident in their processes. Over 60 percent said they had no plans to make changes or that their systems and controls were robust enough to address any concerns.

Less than 25 percent indicated they had implemented changes as a result of the thematic review, which was conducted earlier this year, and just over 15 percent said their carrier had addressed any matters required.

MGAs conceded there are certain barriers to increased participation in claims. Over 70 percent said there needed to be greater clarity of their claims role and a change in perceptions around the value of their involvement. Other barriers to participation were: more accessibility to data (27 percent), claims not being notified to MGAs (24 percent) and the lack of a standard data capture vehicle for carriers (21 percent).

Commenting on the MGAA Matters Survey results, Mark Birrell, chief executive officer of Castel, said: “Participation in claims is a prerequisite of underwriting and MGAA members make this point clear in their responses to our latest survey. With MGAs keen to expand their claims role, and recognizing the need for their businesses to have the appropriate systems and talent, access to data, and best practice approach in place, an enhanced position will not only benefit customer outcomes but also their underwriting, carrier and distribution relationships.”

Peter Staddon, managing director of the MGAA commented: “The fact that MGAs want a more prominent role in the claims process should be welcomed by insurers and brokers. Their call for more coordination among all parties to the claim, rather than adding to the process, will help to ensure more appropriate customers outcomes.

“With this increased prominence comes the need to address potential inhibitors. The need for greater clarity of the MGA’s role and tackling perceptions around whether they should have a claims role at all are important to address, and the association will continue to highlight the contribution MGA can and do bring to claims. I welcome the opportunity to engender greater debate on this topic,” Staddon added.

* MGAA Matters is a research-based partnership between the MGAA and MGA start-up specialists Castel Underwriting Agencies, which was launched in 2014 to identify and raise awareness of the issues currently impacting the growth and success of U.K. MGAs.

Source: Managing General Agents Association (MGAA) and Castel Underwriting Agencies

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