MGA insurance software calls for even greater capabilities than agency insurance software. While the core focus of agencies is to sell policies, Managing General Agents (MGAs) must take this a step further to underwrite as well.
There is a common challenge today for MGAs to compete in an entirely new niche of embedded insurance.
The MGA Landscape
Many carriers struggle with direct to consumer insurance policy sales. While incumbent P&C carriers are renowned for maintaining retention rates and crafting competitive policy products, agencies and brokers excel in selling policies.
In today’s digital age, a niche has opened for MGAs to not only manage lead generation but also the underwriting, distribution, renewal and claims administration process in new ways. This evolution has helped shift industries, such as banking, towards embedded insurance.
MGAs & Embedded Insurance
Insurance customers do not typically consider P&C insurance coverage until they have acquired the property they are insuring. Conversations on acquiring this property tend to be communicated through banks, such as mortgage and auto loan lenders.
When a bank is prepared to service the loan in addition to insurance on the property, the bank greatly expands its footprint by embedding insurance into the services offered, introducing customers to a complete ecosystem of financing and insuring product lines.
Embedded insurance can be supported by an MGA team, working in tandem with the loan lender, to sell policy coverage at the exact moment the customer finances the property to insure. The MGA can work seamlessly with the lender to transition the customer from the bank’s side of the business and into the insurance’s side of the business. However, given MGAs have much higher expectations compared to agencies and the focus of the MGA’s business goals may shift within this new niche, challenges may occur.
WaterStreet Company supports MGAs with Policy Administration Software (PAS), complete with all the tools necessary to nurture customers through the embedded insurance path.
5 Steps for MGA Insurance Software
1. Meet front and back office needs.
Start by evaluating your policy lifecycle and the administrative needs that follow. Depending on relationships between the MGA and referrers, whether from a bank or related partners, some parts of the policy lifecycle may be completed by another party.
At a minimum, MGAs must have the ability to bring a policy from quote to bind, administering each policy with a straight-through and repeatable process backed by a built-in document management system. Workflows for policy administration must be integrated into the business, allowing business rule alerts and guided resolutions to help policy administrators.
Solutions such as WaterStreet Company’s PAS also have the ability to enhance direct to consumer engagement. When the P&C solution includes a white-labeled customer portals, policyholders are able to directly submit and retrieve documentation and information on their policy without contacting customer service. Progressive Web Applications are another highly desirable method of unifying the experiences of policyholders and new customers on mobile and desktop devices, allowing faster speed to market on new products and deeper marketing insights into your site’s user behavior.
2. Consider all elements of Claims Administration.
Many MGAs are also expected to manage Claims Administration. This means the MGA must become the point of contact for the First Notice of Loss through to claims processing, as well as loss reserve management.
Loss reserve management calls for periodic analysis of trends as well as real-time data on open and closed claims. A history of data best serves MGAs to help form predictive considerations on where the loss reserve is headed. Loss triangles are among the trickiest forms of insurance industry reporting and are given deep consideration by WaterStreet Company’s solution experts.
A solution for identifying fraud, quickly closing claims through claims triage, and scaling operational efficiency with task management is necessary for reliable claims management services.
3. Ensure support for Underwriting.
MGAs sometimes have difficulty finding the right underwriting tools. The solutions used by many agencies and brokers are proficient in quoting new policies, but these business models often rely on carriers to underwrite and bind the business. MGAs take the agency’s model a step further to close the business by underwriting new policies, also taking on greater risk.
Underwriting management requires analysis in order to properly rate policies, calling for tools and expertise beyond agency capabilities. It’s important for MGAs to ensure total control over the underwriting process, maintaining speed and efficiency while rating policies. Common underwriting bottlenecks include non-conforming policies, delays in underwriting documents, outdated PAS solutions, and staffing inefficiencies. MGAs must step up to become masters in this discipline of insurance in order to fulfill the expectations of embedded insurance.
4. Find a no-fuss solution for end-users.
The expertise needed to run an MGA business is closer in comparison to a carrier than an agency. When an MGA has expanded the scope of the business into underwriting, claims administration, advanced accounting and customer service, it’s important to arm team members with the most efficient easy-to-use tools available.
No-fuss solutions do not complicate the process. Retaining a member of the team on staff for coding insurance solutions is not a desirable option when solutions tailored to MGAs with software support are readily available.
When running a smooth and efficient workflow between businesses, the ease of use and connectivity between solutions is key.
5. Ensure an API ecosystem.
An Application Programming Interface (API) is a gateway between systems. When an MGA must seamlessly connect with a third-party solution, whether for advancing underwriting risk assessment or integrating with a more flexible payment processing system, it’s essential to have a robust API to bring this data into the PAS.
APIs are used for both internal data management and customer-facing data management. APIs unlock many possibilities to collect data outside the MGA’s closed insurance system. Creative thinkers within the MGA are empowered to think outside of the company’s internal data limits.
When companies are not able to bring in data from outside sources or have difficulty consolidating data within their own systems, companies fall into a disparate data management process. Reporting becomes difficult to consolidate and inaccurate without carefully applied context. Many insurance businesses may experience this first-hand with excessive spreadsheets and several days to compile routine reports.
MGA Insurance Software Provider: WaterStreet Company
WaterStreet Company offers the advantage of being a one-stop shop for nearly endless capabilities. Not only are we capable of connecting to any number of third-party vendors, we offer an all-inclusive Policy Administration suite with claims management, billing, document management, reporting and more built in.
We offer solutions tailored to the next-generation of MGA needs.
Reach out to WaterStreet Company today to request a consultation and demo of our solutions.