I recently shared an article about MGAs/intermediaries having a solid future in the London Insurance Market but, is it being made too costly for the smaller MGA's to be able to afford the systems they need to provide the data required due to Solvency II or demands from insurers? More and more investors are picking up on the fact that financing start-up MGAs is a good investment opportunity, but could there be more support given to MGAs from the London Market? Or, perhaps the overall aim of the LM TOM will provide a solution?
A straight-through processing solution for those holding delegated authority should be provided by London’s risk carriers. Many MGAs work without the benefit of an integrated processing system, and so are likely to embrace such a solution. Others, primarily the largest MGAs, have invested significant sums in their systems, and are therefore less likely to adopt another which complicates their processes. They are more likely to walk away to a market with fewer and lower hurdles. But if some other benefit is attached to adopting a new system, they will be much more inclined to swap out of their existing, costly tech infrastructure. Providing a process solution at no cost, and incentivising producers by adding another percentage point or two of commission, will make London a more popular risk destination for MGAs