I first learned this at Sequel, now Verisk Specialty Business Solutions, where we developed a portal, and then at Aon, where for three years I developed and launched new products to market. Since joining Novidea, I have gained further valuable insights into how to use innovative and disruptive technology to make this happen.
Technology’s impact on the new product lifecycle
When working in partnership with carriers, MGAs can use the technology to source opportunities and add ‘speed to market’ across distribution channels, followed by efficient operational support.
There are three parts to the lifecycle of a new insurance product for MGAs:
Part one – finding a gap in the market, the ‘big idea’
Part two – collaborate on the product with carriers, so the potential market fit and the opportunity for a new revenue stream is clear
Part three – distributing and operating the new product
Although technology can be useful for all three parts of the product lifecycle, the latter is where it has the biggest impact. That’s because the key to achieving speed to market is being able to use technology to distribute, administer, and operate a new product.
Think about distribution. If the new product is retail or commercial, do you have an online portal? If it’s wholesale, do you have a broker network? Is there an effective channel for new submissions? Technology is vital to distribution either way.
Once you’re selling that product, your policy admin system needs to capture the details of the new product and policies bound against it. The policy admin system needs to capture and monitor GPI limits agreed with capacity providers, and, in many cases, automate premium rating. It must also support compliance and legal, as well as audit.
Then there’s the back-end. Is there manual intervention in bordereaux production? Does your system generate the necessary Lloyd’s submissions? Can it ensure that you are compliant with all the relevant regulations? Does it interact with carriers directly to share policy information with them? Does it calculate loss ratios and produce actionable Management Information (MI)?
Sharing data with stakeholders
This is especially important from an MGA perspective, because MGAs can use technology to distribute the product to the end-client, to capture and manage data effectively, and to share data externally with regulators, Lloyd’s, and capacity providers.
It is vital to be able to share relevant data with the latter, for many reasons.
In an increasingly competitive market, the more MI you can offer to capacity providers with added value and actionable insights, the more of an advantage you will have.
Imagine, at the drop of a hat, being able to tell them exactly how much you’ve increased their revenues by introducing your new product, or being able to show how low their loss ratios are, with enriched reporting factors like business line, geographical location, or by client sector, or all three – all of which can lead to generating more business or increasing your commission. No more manually submitting report requests to the IT team and waiting (at least) two weeks for an answer!
The MGA technology challenge
At the recent Managing General Agents’ Association annual event, there was a fascinating panel where technologist Bart Patrick, CRO at Genasys, Scott Thomson, CTO at Adiona and broker, James Woollam, MD of Hayes Parsons Insurance Brokers, shared their views. James said that what he thought he really wanted was one system that would make his life easier by having everything in one place.
The issue he faced with vendors was that this broking system was, by his own admission, clunky and difficult to add new products to. Any changes that he needed required him to go back to the vendor to code and test those changes from scratch – a slow and expensive process.
Scott, by contrast, said he would use the best technology solutions for each function: the best MI tool, the best accounting tool, the best portal, and so on. This is what James ended up with, a multi-system architecture, because despite wanting a ‘one system for all’ approach, he couldn’t find it in the market at the time.
The challenge with a multi-system architecture for most MGAs is how to integrate all those separate software tools in a way that works efficiently, and how to get valuable data from all those different sources into a single actionable output.
The reality today is that the cost of integration is often high and the speed to market is slow because developing one new product means applying change to many systems.
Taking the right road
In the MGA technology space, old legacy systems are not fit for purpose and the multi-tool solutions favoured by the technologist are often too slow and expensive to develop and implement – let alone collate the information from each into useable reporting.
However, the good news is there’s a third route – a solution for MGAs that is a cloud-based insurance management platform, by Novidea, that is fully configurable, easy to update, and that hits the technology target of what every MGA needs.
For instance, in our platform it’s easy to configure new products. If it’s a Lloyd’s product, it will generate bordereaux automatically. Generating MI for carriers is simple, because this is a standard option. It’s even easy to set up a new secure customer-facing web portal for direct distribution.
An end-to-end, born-in-the-cloud platform that’s easy to configure and implement – that’s the right route for MGAs looking to accelerate their speed to market for new products. Fast, flexible, and cost-effective too.
Learn more about Novidea’s offering for MGAs