It’s not always rosy in the garden



  • Executive insight
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    Things are a-changing in the broker world.  While remaining committed to giving customers expert advice and service and giving insurers access to their customers, many have now evolved, with some bigger brokers changing the way they do business. This change has been brought about by their feeling that they need to diversify, seeking greater control over the products that customers buy and growing their ability to act as agent for their clients. These brokers not only want to distribute product but to create it too, with many only turning to insurers for capacity.

    And these Broker MGAs can be great low touch business for insurers happy to delegate their pen and win a good chunk of business. But this option doesn’t work for specialist insurers like us. Giving away capacity on our retail products means we’d have to give away our underwriting authority and right to say no to business that’s not in our appetite – which of course goes against our very ethos as a specialist insurance provider.

    We only have to look to the high net worth space to see that broker MGAs don’t always have a place at the table. High net worth business requires attention to detail and a strong heritage in dealing with bespoke and often complex insurance needs. We’ve been offering high net worth insurance for 25 years next year so we get this but the reality is that broker MGAs don’t offer the same value that clients have to come to expect. They aren’t good for business and they aren’t good for customers.

    While MGAs are the right path for some brokers, they won’t be the right trail for everyone. Brokers should never underestimate the service they provide for their customers and their important role in the insurance buying journey. It’s important that they keep sight of the customer instead of chasing what, for some, will be short-term and unsustainable gains.

    Ross Dingwall is Managing Director of Hiscox UK’s Broker Channel.  

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