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August 24, 2022

Partner Perspective: An Interview on InsurTechs and MGAs

Through your continued involvement with the Global Insurance Accelerator (GIA) supporting innovation in insurance, what new trends are you seeing?

As a mentor with the Global Insurance Accelerator, I have the opportunity to meet with various InsurTechs starting up every year. Most of the startups tend to not come from insurance backgrounds, and are typically tech companies moving into the insurance industry. Seven or eight years ago growth in the InsurTech space was primarily driven by Property & Casualty groups, but we are seeing many more now in the Life & Health sectors.

The unique approach that I get to take when consulting with GIA startups is bringing the insurance expertise into the “tech” arm of InsurTechs.

Why is there a rise in insurance companies working with Managing General Agents?

Managing General Agents (MGAs) and other entities with underwriting authority have become a significant part of the insurance ecosystem. The two major trends in the industry that have led to a rise in companies working with MGAs:

  • Historically, MGAs and insurance companies operated as exclusively two different types of entities. More recently, through raising capital, many MGAs have bought their own insurance company qualifying them now as a carrier. At Johnson Lambert we have seen this from both the purchasing lens as we walk clients through the buying process, but also from the acquisition end of the deal with other clients.
  • Along with insurance companies becoming increasingly more interested in the underwriting capabilities of MGAs in the insurance industry, AM Best recently discussed the impact of MGAs not being monitored, and so AM Best released a performance assessment for Delegated Underwriting Authority Enterprises. We have conducted internal audit services of MGAs on behalf of our insurance clients, and we provide financial statement audits, SOC reports, and comprehensive consulting services directly to MGAs.

What questions are MGA clients asking you right now?

Most of the MGAs we have seen and work with don’t have very big teams, so the number one thing they want to know is that their solution-provider is going to relieve some of that administrative burden.

  • Many of these new start ups do not have insurance backgrounds and do not realize how important revenue recognition is, or how to account for investor equity instruments. We have an efficient solution because we already have the revenue recognition templates built for MGAs.

What’s the JL differential when it comes to working with MGAs?

Our advantage is that Johnson Lambert is nimble, we also have a start up mentality, and possess historical knowledge of the insurance industry. We can help startups fill that missing gap that is imperative to success in the insurance industry. We have a multitude of data analytic tools incorporated into our processes which strengthens our understanding of the client’s unique perspective.

  • We are also able to provide additional resources, such as our Regulatory team providing reassurance and guidance when it comes to entering new markets and navigating state regulations
  • Often startup companies come to us and they don’t yet know what they don’t know. For example, MGAs looking to acquire insurance carriers typically do not have a solution-provider to do both GAAP and STAT accounting or auditing. Johnson Lambert can offer a one-stop-shop set of services to these clients.

How does Johnson Lambert stay involved and on top of industry trends?

We attend events like Insurtech Connect, the largest InsurTech gathering in the United States. I’m looking forward to attending this September to learn more about current developments in the space and reconnect with colleagues in person.

Lily Morris

Lily Morris

Communications Coordinator

Rachel Hane

Rachel Hane

Marketing Manager

Partner Perspective: An Interview on InsurTechs and MGAs

Through your continued involvement with the Global Insurance Accelerator (GIA) supporting innovation in insurance, what new trends are you seeing?

As a mentor with the Global Insurance Accelerator, I have the opportunity to meet with various InsurTechs starting up every year. Most of the startups tend to not come from insurance backgrounds, and are typically tech companies moving into the insurance industry. Seven or eight years ago growth in the InsurTech space was primarily driven by Property & Casualty groups, but we are seeing many more now in the Life & Health sectors.

The unique approach that I get to take when consulting with GIA startups is bringing the insurance expertise into the “tech” arm of InsurTechs.

Why is there a rise in insurance companies working with Managing General Agents?

Managing General Agents (MGAs) and other entities with underwriting authority have become a significant part of the insurance ecosystem. The two major trends in the industry that have led to a rise in companies working with MGAs:

  • Historically, MGAs and insurance companies operated as exclusively two different types of entities. More recently, through raising capital, many MGAs have bought their own insurance company qualifying them now as a carrier. At Johnson Lambert we have seen this from both the purchasing lens as we walk clients through the buying process, but also from the acquisition end of the deal with other clients.
  • Along with insurance companies becoming increasingly more interested in the underwriting capabilities of MGAs in the insurance industry, AM Best recently discussed the impact of MGAs not being monitored, and so AM Best released a performance assessment for Delegated Underwriting Authority Enterprises. We have conducted internal audit services of MGAs on behalf of our insurance clients, and we provide financial statement audits, SOC reports, and comprehensive consulting services directly to MGAs.

What questions are MGA clients asking you right now?

Most of the MGAs we have seen and work with don’t have very big teams, so the number one thing they want to know is that their solution-provider is going to relieve some of that administrative burden.

  • Many of these new start ups do not have insurance backgrounds and do not realize how important revenue recognition is, or how to account for investor equity instruments. We have an efficient solution because we already have the revenue recognition templates built for MGAs.

What’s the JL differential when it comes to working with MGAs?

Our advantage is that Johnson Lambert is nimble, we also have a start up mentality, and possess historical knowledge of the insurance industry. We can help startups fill that missing gap that is imperative to success in the insurance industry. We have a multitude of data analytic tools incorporated into our processes which strengthens our understanding of the client’s unique perspective.

  • We are also able to provide additional resources, such as our Regulatory team providing reassurance and guidance when it comes to entering new markets and navigating state regulations
  • Often startup companies come to us and they don’t yet know what they don’t know. For example, MGAs looking to acquire insurance carriers typically do not have a solution-provider to do both GAAP and STAT accounting or auditing. Johnson Lambert can offer a one-stop-shop set of services to these clients.

How does Johnson Lambert stay involved and on top of industry trends?

We attend events like Insurtech Connect, the largest InsurTech gathering in the United States. I’m looking forward to attending this September to learn more about current developments in the space and reconnect with colleagues in person.

Lily Morris

Lily Morris

Communications Coordinator

Rachel Hane

Rachel Hane

Marketing Manager