MGAA's Keating on missed opportunities

At its very core, insurance ultimately comes down to just one moment: the claim. It is the point when the promise we make to customers is tested. 

Everything that happens before it: underwriting, distribution, pricing, matters, but it is the claims experience that determines whether a customer feels their insurer has truly delivered, and feels the sector itself is worthy of their trust and investment.

We all know this. Yet for many years the industry has tended to treat claims as an operational function rather than a strategic priority. That mindset is becoming harder to defend. 

Claims are too often treated as the final stage of the insurance process, something that begins only when a loss occurs. In reality, the quality of claims outcomes is shaped much earlier.

Michael Keating, Managing General Agents’ Association

In a soft market, where underwriting margins are tightening and premiums are under pressure, claims often represent the only area where value can still be protected. More importantly, they are the point where trust is either strengthened or lost.

Claims regulation

This is why the Financial Conduct Authority’s latest Regulatory Priorities report deserves close attention. 

The regulator has made it clear that claims outcomes remain firmly in its sights. Too many customers are still having poor experiences when they need their insurance most. 

Firms are expected to respond promptly, fairly and transparently, and to demonstrate that their products and services deliver good outcomes in line with the Consumer Duty.

For the MGA community, this focus is particularly relevant. More than 90% of the MGAA MGA members, outsource claims handling to third-party administrators. Delegated authority models bring real advantages. 

They allow specialist expertise, speed and flexibility, particularly in niche markets. But they also create a more complex claims journey.

A single claim may involve the broker, the MGA, the carrier, a third party administrator and often several other service providers in the supply chain. 

Each step introduces the possibility of delay, confusion or misalignment. From the regulator’s perspective, the question is simple: who is responsible for the customer experience?

Accountability

Delegating authority does not mean delegating accountability. MGAs and capacity providers must be able to demonstrate clear oversight of claims performance. 

That means strong governance, reliable management information and a clear understanding of how outsourced partners are performing.

But regulation should not be the only driver for improvement. There is a much bigger opportunity here for the industry.

Claims are too often treated as the final stage of the insurance process, something that begins only when a loss occurs. In reality, the quality of claims outcomes is shaped much earlier. 

Product design, underwriting strategy, broker relationships and data infrastructure all play a role in determining how smoothly a claim is handled. If these elements are not aligned, problems will surface when the pressure is on.

The wider market environment is also adding new pressures. Commercial premiums in many lines are softening. 

Claims inflation remains stubbornly high, particularly in areas such as bodily injury. Fraud continues to evolve. Third-party suppliers in the claims chain are becoming more sophisticated and more commercially aggressive.

Data, Data, Data

All of this makes oversight and insight more important than ever. One theme that repeatedly comes up in conversations across the market is data. 

The industry holds enormous amounts of valuable claims information, yet we are still only beginning to use it effectively. 

Better analysis of claims data can help identify fraud earlier, highlight weaknesses in processes and provide a clearer view of how delegated claims arrangements are performing.

Technology will undoubtedly help. Automation, analytics and artificial intelligence are already improving claims triage, fraud detection and customer communication. 

But technology alone will not solve the challenge. The real progress will come from stronger collaboration across the claims ecosystem.

Brokers, MGAs, carriers and TPAs all play a role in the claims journey. When those participants operate in silos, the customer experience suffers. When they work together with shared visibility and aligned incentives, the results are far better.

At its best, insurance is about providing reassurance at difficult moments. 

When a family has lost a home or a business faces disruption, when a shipping lane is blocked and when aircraft are stranded – what individuals and society need most is clarity, support and confidence that their insurer is on their side. 

Delivering that experience is not only good for customers. It is also good for the long-term health of our market, and the resilience of our global economy.

The MGA sector has always prided itself on agility, specialist expertise and innovation. 

Claims should be an area where those strengths are clearly visible. If we get this right, we can improve customer outcomes, strengthen trust in delegated authority models and demonstrate why MGAs continue to play such an important role in the insurance market.

This is exactly the conversation we will be continuing at the MGAA Annual Conference, where brokers, MGAs, carriers and claims specialists will discuss the missed opportunities in today’s claims ecosystem and how we can improve it.