New trade association launches at Lloyd's
Thu 15 Sep 2011
The UK Managing General Agents Association has been launched to represent the interests of UK-based managing general agents (MGAs), and encourage closer contacts within the sector. The launch came a day after Lloyd’s held its first one-day event for UK insurance brokers.
Finding a voice
The Managing General Agents’ Association (MGAA) was officially launched earlier this month with an event at Lloyd’s Old Library, attended by over 100 representatives from MGAs, Lloyd’s syndicates, insurers and brokers.
“Lloyd’s has a long and established relationship with the managing general agency sector, which generates some 30% of the market’s premium,” says Keith Stern, Lloyd's
Regional Manager for the UK and Ireland. “Lloyd’s has been an enthusiastic supporter of the new association, which will now be able to address the specific needs of this important sector.”
An estimated 10% of all UK nonlife premiums are transacted through MGAs and delegated authorities. However, regulators, as well as many brokers and insurers, do not fully understand the role of an MGA. Misunderstandings and the lack of a clear regulatory position has created greater cost and bureaucracy for MGAs.
“The new association will give the managing general agency sector in the UK a much needed voice, in particular in its dealings with the regulator,” says Stern, who is also a member of the MGAA steering committee. “Regulators and the industry need to better understand the specific role of the independent MGA and how they differ from insurers and intermediaries like brokers.”
As the representatives of underwriters, managing general agents are an important source of business for insurers, including Lloyd’s.
Also known as a coverholder, an MGA will act as a syndicate’s representative on the ground – offering Lloyd’s property, liability and specialty products to individuals and companies.
Lloyd’s working with MGAs
Lloyd’s Strategy Review has identified managing general agents as providing opportunities for the market to develop profitable business. In recent years Lloyd’s has improved oversight of coverholders, whilst looking to make Lloyd’s an efficient and accessible market for MGAs.
“Lloyd’s is keen to make the market an efficient place for coverholders to do business,” says Stern. “We have been working to make Lloyd’s transparent for MGAs to access, but without lowering standards. The key is to work with underwriters to bring more profitable business to the market at an incremental pace.”
While the MGAA will provide a platform for agents to communicate with regulators and the insurance industry, it will also provide a focal point for the MGA sector to network and exchange ideas.
The association will look to combine education and learning with networking, says Stern. For example, the launch event included presentations on Solvency II, being a Lloyd’s coverholder and legal issues for MGAs, as well as an opportunity for underwriters and agents to meet.
There are plans to launch a new MGAA website in January 2012 to provide information to MGAs, as well as a platform to build an online community. The association is also planning a schedule of events for 2012 to address important topics, such as changing European solvency regulation.
Work in progress
The MGAA is looking to recruit a chief executive to work alongside its chairman and former Lloyd’s underwriter Reg Brown. The CEO will drive new membership and focus the association’s activities to the needs of its members.
The association launched with 40 MGA members, although there may be as many as 200 MGAs in the UK, says Stern. It is also supported by 20 associate members, including Lloyd’s. It is expected that membership will increase as the association becomes more established.
The association has also drawn on the experiences of established trade bodies like the American Association of Managing General Agents and the Australian Underwriting Agencies Council. “The MGAA has looked at what these association offer and has been able to cherry pick – there are already many good ideas out there,” says Stern.
First broker day
Earlier in September Lloyd’s also hosted its first broker day, giving regional intermediaries an opportunity to learn more about Lloyd’s and meet the market’s underwriters.
Over 100 brokers and Lloyd’s managing agents took the opportunity to network and meet senior market representatives, including Lloyd’s chief executive officer Richard Ward. The event follows a meet-the-market broker day in Northern Ireland and the annual broker event held at Lloyd’s for US brokers.
The broker event is an opportunity for underwriters to meet local intermediaries that do not have an existing relationship with Lloyd’s, says Stern.
Find out more about UK brokers and MGAs