For nearly 150 years, managing general agencies have been an important sales and distribution arm of the U.S. insurance industry, initially offering a way for an early insurance company to enter emerging Western states without having to invest in developing a local office. As the carrier’s fronting mechanism, the MGAs were authorized to underwrite, issue and sign insurance contracts on its behalf in these regions.
Executive SummaryNew managing general agencies are leveraging technology to disrupt the status quo in commercial lines for small and midsize businesses and specialty lines for consumers with some entirely new entrants, like Joyn, and others linked to well-known brand names, like Berkshire-Hathaway and Chubb. Veteran Insurance Journalist Russ Banham got the scoop on building efforts for all of them from the executives leading the innovation efforts.
MGAs continue to “hold the pen” for property/casualty insurers in providing a cost-effective way for insurers to generate new business. Until recently, however, the wholesale brokers were as stodgy as the rest of the legacy industry. No longer is this the case, following the explosion in InsurTech MGAs using technology to quote, underwrite, bill and price property, casualty and health insurance policies in real-time—a compelling value proposition for prospective customers.
Emphasizing that today’s MGAs are a new breed, the companies have selected brand names as trendy as other InsurTechs’ monikers. Among them are Joyn and biBERK, two that perceive a ripe opportunity to engage businesses with digital insurance policies, which are as easy to understand as they are to buy. Here are their stories, followed by a couple others.