MGA Poll Shows Appetite For More Prominent Role In Insurance Claims Process
19 November 2015
MGAs are keen to be more involved in the claims process; they view claims as a core competence and recognise its intrinsic link with underwriting according to the latest MGAA Matters Survey1.
The fourth survey looks at the current role of MGAs in the claims process and their future plans to develop their claims functions and processes, plus it highlights issues the sector faces in gaining more prominence and participation in the claims process.
MGAs are clear about the need to have a role in claims; nearly 53% said claims are integral to underwriting so they need to be more involved and close to 24% saw themselves as enablers, ensuring the delivery of appropriate outcomes. Their position is further affirmed by the fact no respondents said claims is not a core competence for MGAs or that claims are the sole domain of the broker and carrier.
MGAs have the foundations in place to facilitate greater claims involvement; 40% have a dedicated claims team or nominated individual and 30% outsource the claims function to a third party or carrier nominated supplier. Expanding their claims operations is planned with a third saying growth either strategically or to support the expansion of business will be a focus over the next three years. Relations with carriers will also be a focus with over 30% saying they will be working more closely with their capacity providers to help develop the process.
Enabling MGAs to have a more prominent role in claims will require specific factors to be addressed. Survey respondents highlighted the need for more co-ordination between all parties in the claims process (44%), greater access to claims data (34%), better use of technology (31%) and the sharing of claims best practice (28%) as the key factors. A quarter said there would also need to be a greater investment in acquiring and developing in-house claims talent.
Despite the increased regulatory scrutiny and outcomes from the FCA’s thematic review into SME claims handling conducted earlier in the year, the majority of MGAs were confident in their processes with over 60% saying they had no plans to make changes or that their systems and controls were robust enough to address any concerns. Under 25% indicated they had implemented changes as a result of the thematic review and just over 15% said their carrier had addressed any matters required.
MGAs concede there are certain barriers to increased participation; over 70% said there needed to be greater clarity of their claims role and a change in perceptions around the value of their involvement. Other barriers to participation were; more accessibility to data (27%), claims not being notified to MGAs (24%) and the lack of a standard data capture vehicle for carriers (21%).
MGAA Matters is a research-based partnership between the Managing General Agents’ Association (MGAA) and MGA start-up specialists Castel Underwriting Agencies (Castel). It was launched in 2014 to identify and raise awareness of the issues currently impacting the growth and success of UK MGAs.
Commenting on the MGAA Matters survey results, Mark Birrell, chief executive officer of Castel said:“Participation in claims is a prerequisite of underwriting and MGAA members make this point clear in their responses to our latest survey. With MGAs keen to expand their claims role, and recognising the need for their businesses to have the appropriate systems and talent, access to data, and best practice approach in place, an enhanced position will not only benefit customer outcomes but also their underwriting, carrier and distribution relationships.”
Peter Staddon, managing director of the MGAA concludes: “The fact that MGAs want a more prominent role in the claims process should be welcomed by insurers and brokers. Their call for more co-ordination amongst all parties to the claim, rather than adding to the process, will help to ensure more appropriate customers outcomes.
“With this increased prominence comes the need to address potential inhibitors. The need for greater clarity of the MGA’s role and tackling perceptions around whether they should have a claims role at all are important to address, and the Association will continue to highlight the contribution MGA can and do bring to claims. I welcome the opportunity to engender greater debate on this topic.”