What a Good MGA Does
May 31, 2022
What does it mean to be an insurance professional? Whether you work for an insurance company, a broker, or an MGA, at its basic form, we provide or secure coverage in the event of an unforeseen event. We are here to ensure that in the event of a covered loss, the claim is paid.
At Excess, we believe that the role of the MGA is to ensure all constituents in the same insurance chain are protected. The guiding principle is to act with integrity as our role is to protect clients’ interest and to ensure we understand their needs, but what does that really mean?
The MGA’s role is to help brokers and their insureds secure the coverage they need at a fair and reasonable price. To help understand the client and ensure the coverage offer meets their needs. As professionals this requires not only to review what the broker has sent, but to ask additional questions to ensure clarity of the risk. The entire insurance chain – client, broker, MGA, and market – must work as a team to create a successful outcome that offers the best insurance solution based on the client’s needs and risk profile.
Here are three additional principles we should follow as insurance professionals:
- Being transparent – as an MGA we are doing the best for the broker and their client, but we also must do what’s best for the insurance company. We need to ensure contract certainty, providing brokers with policy documents in a timely manner. We need to provide explanations as to why risks get declined, as clients deserve to be notified why certain insurance requests were denied.
- We need to adhere to all the regulatory requirements from FRSA and provincial regulatory bodies, including keeping money in trust accounts and following industry standard accounting practices
- Communicate effectively – unfortunately, there are occasions when MGAs decline or get off risk and these decisions are never taken lightly. There is a great deal of thought and understanding put into this as we know the impact to an individual or business. We have an obligation to provide our brokers and clients with sufficient notice to allow them to find alternative coverage.
For the industry to continue to cover claims and high hazard risks we need to earn profits. We also understand that this has been a challenging time for insureds and profit should not be the only driver in our decisions. It’s on us to pay attention to our clients, not cut corners, offer coverage that meets the clients risk profile, and pay claims. As an industry, we all want and need to be profitable, but we also need to continue to act with integrity.
At Excess we believe that MGA professionals are an important part of the insurance chain and by continuing to act with integrity we will go further in helping all links of this chain being stronger, and we don’t need regulatory approval to know what the right thing to do is.
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