How to build trust and remove a whole lot of pain from the carrier-MGA relationship

Carriers and delegated authorities were in full force this year at WSIA Annual Marketplace focused on building on existing relationships; making new connections; and exploring shared opportunities to grow their businesses. These relationships, which represent a critical component in the insurance value chain, must be built on trust.

It is difficult to truly trust the partners underwriting on your behalf with your capital if you can’t see what they’re doing. Yet the ongoing reliance on manual bordereaux reports means many carriers are still operating in the dark about how their capacity is being deployed by delegated authorities and what this means for their exposures.

Carriers working with multiple MGAs across multiple books of business receive dozens or hundreds of bordereaux spreadsheets, and potentially thousands of risk and location schedules, every quarter. The data reports are typically 90-120 days out of date by the time they reach the carrier and, having been created manually, many contain inconsistencies and human errors.

This puts the carrier in a very difficult position, having to invest a huge amount of time managing, cleansing and structuring that data before it can even be analyzed – and even then only being able to respond to exposure accumulations, authority breaches or emerging opportunities when it is far too late.

For many, this task is simply too big to manage across a large portfolio, so they instead operate on blind trust, with a limited ability to analyze their portfolios due to the opaque and inconsistent nature of the information at their disposal.

Verisk’s Sequel Impact is a web-based exposure management solution designed to fix these problems which is already putting many carriers at a huge competitive advantage by enabling them to view and analyze their exposures in real time and instantly understand the impact of adding new policies to their portfolio.

Impact brings multiple sources of risk and exposure data together in one interface, with every insurable asset automatically uploaded and augmented with API-enabled data sets, enabling a more accurate, holistic view of risk. Extensive real-time analytics, models and data visualizations enable carriers to simulate ‘what if’ scenarios, assess losses across multiple classes of business and perils simultaneously, and model future losses.

Crucially, Impact now includes a data cleansing tool which users report delivers a 10x reduction in the time spent evaluating and cleansing bordereaux schedules. Pre- or post-bind information is ingested into Impact and automatically validated, cleansed, standardised, geocoded and enriched before being presented back to the underwriter, who can get straight to their evaluation. What carriers say typically takes between 10 and 15 hours for each schedule they receive now takes just an hour.

Impact creates a single source of truth on which to base decisions, helping optimize risk selection and pricing while avoiding unwanted aggregation of exposures. It also enables carriers to understand and respond to loss events in real time, improving response times, reducing loss adjusting expenses and enabling more agile capital deployment.

In a rapidly digitalizing global insurance market, relying on data that is created manually; runs on a significant time lag; and requires hours of manual cleansing before it can be evaluated, can only put companies at a competitive disadvantage.  

Carriers need reliable information at their fingertips and a future-proof view of any risk or exposure. This enables them to deploy capacity with confidence – trust – in their delegated authorities, meaning everyone in the chain can operate with greater speed, agility and efficiency than ever before.

If you’d like to learn more about Impact or simply talk about the challenges you face as a carrier or MGA and the solutions that could potentially help, reach out and schedule some time with me at todd.rein@verisk.com. The team will also be at Target Markets (TMPAA) in Scottsdale, Arizona on October 17-19.

Author: Todd Rein, Head of Sales US, Verisk Specialty Business Solutions