Innovation in P&C Insurance? Look no further than InsurTech MGAs
By Mark Breading, Senior Partner of Transformation Services, ReSource Pro —
Okay, the title of this blog may be stretching the point – innovation is certainly occurring in all segments of the P&C industry. However, a strong case can be made that insurtech MGAs – startups from the last decade-plus – are catalysts for change and a big factor in driving innovation in the insurance industry. Our research in this area with our partner InsurTech NY reveals how these innovators are evolving and contributing to industry transformation.
Why are MGAs are driving innovation in the insurance industry?
MGAs have always been known for their ability to identify key customer segments and create products and programs with their carrier partners to address unique risks for those customers. Incumbent MGAs are part of the product innovation picture as well. But it seems that the new models, new products, and new market approaches of the last decade have been spearheaded by insurtech MGAs. A few examples illustrate the latest activity in these spaces.
Cyber insurance
As the world becomes more digital and connected, cyber attacks have exploded for businesses and individuals. There have been over 20 startup MGAs in this space launched since 2010, providing various combinations of assessment and prevention, insurance coverage, and assistance with recovery efforts. Examples include Boxx Insurance, FusionMGA, and Evolve MGA.
Embedded insurance
Many of the prominent platforms enabling embedded insurance are MGAs, including Cover Genius, Stere.io, and Boost. This approach enables the industry to cover both traditional risks and previously uncovered risks in novel ways and holds great promise for industry growth.
Parametric insurance
MGAs are at the forefront of creative parametric insurance in a wide variety of spaces, including supplemental coverages for catastrophes, travel delays, event cancellations, and other situations where an externally verifiable data point can automatically trigger a claim payment.
On-demand and episodic insurance
There is a class of insurtechs we term “digital platforms” that are licensed as MGAs with the main focus of collaborating with (re)insurer partners to cover ride-share, vacation rentals, events, travel, and other micro-coverages for specific time periods and events. Slice would be the poster child for this category, but there are many others.
Along with the examples above, many insurtech MGAs are what we call “line- or segment-specific.” These specialist MGAs focus on flood insurance, workers’ comp, commercial auto, pet, and many other individual lines or groups of lines (especially liability).
Complex risks create new opportunities to innovate
It’s clear that the risk landscape is becoming more complex. This means that insurance companies have an opportunity – and an obligation – to differentiate and meet these growing needs through a deep understanding of exposures for specific customer segments. At the same time, advancing technology and new approaches now enable more innovation in the insurance industry, addressing more of the risks in the world. These factors will likely drive continuing growth and success in the MGA segment over the next decade, with insurtech MGAs leading the way.
Click here to download a copy of ReSource Pro and InsurTechNY’s research report that dives into the evolving landscape of insurtech MGAs.
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About The Author
Mark Breading is known for his insights on the future of the insurance industry and innovative uses of technology. Mark consults with insurers and technology companies on forward-thinking strategies for success in the digital age. His inventive methodologies, fresh ideas, creative conceptualizations, and ability to incorporate InsurTech and transformational tech in business strategies are unparalleled. He also leads SMA’s research program, publishing 25-30 research reports per year and conducting various custom research projects for insurer and vendor clients. His thought leadership in the areas of InsurTech, transformational technologies, customer experience, and digital strategies has earned him a ranking of one of the “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the ten finalists for the “Top Global IoT in Insurance Influencer Award.”
Before joining SMA in 2009, Mark spent 25 years with IBM in roles including the Global Insurance Strategist and Director of Global Financial Services Executive Conferences in addition to leadership roles in consulting and marketing. Mark co-developed IBM’s Account Based Marketing program and led the global project office to implement ABM across all industry verticals worldwide. Mark has held both technical and business roles in sales, consulting, marketing, and business strategy and has advised insurers around the world for almost 30 years.
About ReSource Pro
ReSource Pro brings integrated operational solutions to insurance organizations to improve growth, profitability and insurance outcomes. Headquartered in New York, ReSource Pro’s global service centers address client operational needs around the clock. Recognized as an industry thought leader and listed as one of Inc. 5000 Fastest Growing Private Companies annually since 2009, the company is renowned for its focus on innovation, service excellence and trusted partnerships, and its unique productivity platform for insurance operations. More than 5,000 ReSource Pro employees provide dedicated support to hundreds of insurance organizations, consistently achieving a +97% client retention rate over a decade. For more information, visit www.resourcepro.com.
SOURCE: Strategy Meets Action (SMA)