MGAs embrace technology to lead insurance industry innovation

Managing General Agents (MGAs) are increasingly turning to technology to stay competitive and drive innovation in the insurance industry. This was the central theme of a recent episode of Beyond the Text, a podcast hosted by Alyssa Gittleman of Conning. Joining her were Lauryn Kothavale, vice president at Conning and author of a recent MGA-focused report, and Kelly Maheu, vice president of Industry Solutions at Vertafore.

The discussion centered on findings from their joint report, Tech Power: How MGAs Are Shaping the Future of Insurance, which examines how technology is transforming MGA operations and market strategies.

Technology as a competitive advantage

Lauryn Kothavale explained that technology has become a critical differentiator for MGAs, enhancing underwriting outcomes, streamlining operations, and increasing agility to respond to market shifts. She noted that MGAs are leveraging technology not only to improve efficiency but also to innovate and deliver tailored solutions to niche markets. Kothavale pointed out that in 2023, MGAs saw a 13% growth in premiums, significantly outpacing the 10% growth of the broader Property & Casualty (P&C) market. This demonstrates the strong demand for MGA offerings and their ability to meet evolving market needs.

3 approaches to technology adoption

Kelly Maheu outlined three common approaches MGAs take when building their technology infrastructure:

1. Carrier Systems: These are often used by affiliated MGAs due to their integration with carrier operations. However, carrier systems can be overly complex and lack the flexibility needed for MGAs to adapt quickly.
2. Agency Management Systems (AMS): Many MGAs originating from agencies use AMS platforms, which can work well for managing limited lines of business. However, these systems often struggle to support expansion into new programs, creating scalability challenges.
3. Focused Core Systems and Tech Stacks: Maheu emphasized that the most forward-looking MGAs are adopting configurable policy administration systems tailored to their unique needs. These systems integrate with advanced tools like APIs, automated underwriting engines, and data analytics platforms to enable innovation and efficiency.

Maheu added that AI and machine learning are becoming integral to MGA operations, enabling advanced capabilities in underwriting, fraud detection, and claims processing.

AI and machine learning are “true gamechangers,” she said. “We’re seeing MGAs use these in so many ways to streamline underwriting, for claims processing and for fraud detection, just as a few examples. And with machine learning, these algorithms can analyze vast datasets and it’s pretty advanced stuff when it comes to identifying trends and making more accurate predictions. Very valuable for the MGA.”

Differentiation through agility, customer experience

Kothavale highlighted speed to market as a key strength for MGAs, noting that many can launch new programs within six months. This agility makes them valuable partners for carriers seeking to enter emerging markets quickly. Flexible technology also allows MGAs to adjust programs post-launch in response to market conditions.

“I would start off by saying speed to market is probably the most important,” Kothavale said, adding, “MGAs can get new programs up and running in a matter of months, most aiming to launch within six months. This kind of agility makes them invaluable partners for carriers looking to quickly break into emerging markets. However, launching new programs isn’t always a straight path. Programs often need adjustments after launch or in response to shifting market conditions, and that’s where the flexible technology comes in. MGAs rely on systems that are not only quick to set up, but capable of adapting rapidly.”

Maheu discussed the growing importance of tools like agent portals and underwriting workbenches. Agent portals facilitate real-time data exchange, reducing manual tasks and enhancing operational efficiency. Underwriting workbenches integrate third-party data and analytics, enabling faster and more accurate risk assessments. She noted that MGAs focusing on improving underwriting and customer experience are positioning themselves as industry leaders.

“The underwriter workbench and the agent portal: these are both key differentiators we’ve seen lately,” said Maheu. “And MGAs who are actively investing in technology are using these to help improve customer experience. Agents, like their clients, expect real-time experience with their partners, so they’re increasingly adding these portals that allow direct customer interaction and that benefits both the MGAs and the retail broker by facilitating the real-time data exchange and reducing that manual and duplicate data entry.”

Strengthening partnerships with carriers

Technology is also redefining relationships between MGAs and carriers.
“Technology is really changing the game for MGAs and carriers, turning what used to be more of a transactional relationship into a true partnership,” she said. “These days, advanced integration tools make it easier to share data in real time. Carriers can instantly see how underwriting and performance metrics are tracking, and MGAs can use that information to tweak strategies on the fly.”

Kothavale explained that advanced integration tools are also fostering greater transparency and collaboration. Carriers can use these insights to monitor performance and adjust underwriting strategies, while MGAs can align risk models more closely with carrier appetites.
She added that MGAs are developing specialized products for niche markets, helping carriers diversify their portfolios and access underserved segments.

Looking ahead to 2025

Both speakers shared positive outlooks for MGAs in 2025. Kothavale noted that while growth may stabilize compared to recent years, MGAs are well-positioned to maintain momentum by focusing on innovation and flexibility. She highlighted the importance of leveraging technology to adapt quickly to changing market conditions.

Maheu predicted that AI and machine learning will play an even larger role in MGA operations, enabling faster product launches, improved customer experiences, and deeper insights through predictive analytics. She also expects more MGAs to adopt tech stacks specifically designed for their unique needs, allowing for scalability and efficiency.

Kothavale concluded that the MGA sector will continue to thrive by capitalizing on its ability to innovate, specialize, and focus on underserved markets. This combination of adaptability and technological investment ensures that MGAs remain a driving force in the evolving insurance landscape.

This report compiled by InsuranceNewsNet staff.