The Top Challenges Facing MGAs Today

Alright.

Good good afternoon, and, welcome everybody to our panel our panel discussion today hosted by Patra, the top challenges facing MG’s today. My name is Greg Morris. I’m, SVP business development at Patra, and I have responsibility for our specialty practice, which is our practice dedicated to serving, MGA’s wholesalers and insurance companies.

I’m joined by Henry Lozinski, who’s, also a member of our specialty sales team.

And importantly, I’m I’m also joined by a group of, distinguished and forward thinking, and I must say quite good looking, panelists who’ve been kind enough to share their afternoon with us and and share their operational and marketplace perspective with us today. So Welcome to all of you, and thanks so much for being here.

Quickly to to our audience, we’ll be recording this today. So, share a link with all of you after we’re done, and we’ll also have this posted on the resources page of the Patra website.

We also hope to reserve about ten or fifteen minutes for questions at the end of the session. So I invite you to use the Q and A feature at the bottom of the Zoom dashboard to ask any questions you might have during during the panel discussion.

Alright. Let me start by quickly introducing our panelists.

Starting off with, Rekha Skantharaja, Rekha is is president and c CEO of Tangram Insurance Services out here in California. Hi, Rekha. How are you?

Doing great. Thanks for having me.

Awesome.

We also have Carl Niedbala, who’s the co founder and COO of Foundershield slash scale underwriters.

Hi, Carl?

Hey, John.

Excellent. And then, lastly, at Brian Scofield, who’s SVP of Commercial over at Orchid Underwriters. How you doing, Brian?

Think you’re on mute.

Doing good. How you doing, Greg? Doing great. Love the jacket.

It’s Florida.

There you go. There you go. Alright.

Awesome. So so, again, thanks for being thus. With that, I think we can probably get this party started. So, let’s start off. You know, I feel like I feel like it would be, irresponsible for me to start an NGA panel, without at least initially discussing this kind of crazy, volatile, unprecedented, insert your adjective here marketplace.

So so, Brian, I’ll probably start with you on this. You know, tell me about what you’re observing specifically from a a capacity and and rate increase standpoint, you know, what’s changed, what’s causing it, probably most importantly, you know, your perspective on how Orchid and others are managing through for this crazy time.

Yeah. You know, I think most, if not all lines of business, I say most, but but not all, we’re probably feeling some of this right now.

Property liability, especially on the on the upper layers, construction, transportation, and others have had significant reductions in in capacity in strengths.

Our reinsurance rates have risen as many of you know upwards of twenty plus percent this year, and and we don’t see that changing, coming up on one one either. And that’s gonna work its way down into the primary market. At some point in time, we’re starting to see a lot of that in in q three, and and we expect to see it in the q four as well. We also have some particularly distressed classes at least on the property side, like, habitational, and hospitality.

And and keep in mind, you know, what we’re finding is as many in the industry just haven’t had to go through a hard market before. Maybe they even forgot what a hard market is. And so, you know, at Orchid, we we actually find ourselves really educating.

A lot of our distribution partners on what this means, how it impacts them, and then how we can help them deliver solutions to their clients.

What what do what do you think? Do you see what do you see kind of trending forward? Are we in this for, for the long haul? How how long is it gonna last?

Well, you know, hard markets historically have haven’t lasted forever.

It’s usually, you know, a couple years. So I I I do feel though that We’re in this for at least the next eighteen months.

And so I would expect a a lot of these trends to continue well into next year. And if not, shortly, into twenty twenty two.

Yeah.

Yeah. So so, Ray, I I believe you’ve had kind of a slightly unique or or maybe different experience with capacity and and rate based on how Tangram is situated. Tell tell us about that.

Yeah. I mean, I think, you know, for us, fifty percent of our portfolio is workers’ compensation, and the other fifty percent is is packaged, which would include general liability property auto and, you know, the excess or umbrella lines. And so it’s really a tale of two markets for us right now. On the comp side, we’re still seeing some lagging to the other lines. Meaning there’s still softness and saturation to a large extent in the marketplace. We’re starting to see signs of forming up.

But there’s still adoption of rate decreases, maybe not to the levels that there were in the last few cycles.

Still competitive rates, still competitive, schedule applications on the property side, you know, just to add to what, Brian had mentioned some of the industries we participate in and have seen some hardening in downstream energy, social services, you know, around the abuse and molestation, and it’s for the more difficult professional lines.

We’ve seen some hardening on, janitorial is a class that we write on the package side, for obvious reasons. A lot of these folks are going in and cleaning up in a time of of pandemic.

So I think it is really industry specific, but I think the broader generalization that there is a hardening to some degree on a spectrum of all lines is certainly true.

I think, you know, trend lines, if you were to ask me trend lines again, I I think there are people that really focus on this and will get this more right than I will. But historically, we’ve seen, contraction in terms of the the length of time a hard market goes on. And it’s possible that, you know, this is not you know, the hay day to speak of two thousand one where it lasted a few years. This could be, you know, four quarters and were done in Murangia side of it. I think it depends on what kind of capital is coming into the marketplace. If we continue to see capital organizing around teams and companies that have no legacy of claims. Well, they’re gonna come in and they’re gonna push us down.

And I think we are starting to see the birthing of more fronting carriers and more reinsurers that are looking to drop into a lower position that is, keeping the market pretty, I think, competitive.

Thank you for that.

Car Carl, I know I know founder shield, or or at scale, where it’s a lot of of DNO and EPL, and I think that’s been especially challenging, right, in this environment.

How are you how are you making decisions about kind of when and where to be competitive on pricing and and when to take a firm stand in this environment? Yeah. So so, Rachel brings up an thing point there. We definitely have there’s a few players in the space that are, that do push the pricing down sort of, with the new kind of fronting carrier reinsurer setup.

We I mean, we make decisions. We we, you know, our markets, our our backers want us to target probably twenty, thirty percent rate increases.

Right now, we try to not, do anything kind of draconian, you know, just across the board, rate increases. We try to take a really methodical, kind of flexible, but rigorous approach to underwriting on our accounts and and, you know, give give something back where we can, but make sure we’re we’re charging, you know, we’re we’re taking premium where we need to. I think one of the things we’ve we’ve also been kind of experimenting with and pushing is rather than you know, rate increases or potentially, you know, broad sweeping exclusions is adding in sort of, risk management service layers so that we can make sure that our our clients, if they don’t, when when they sign on with us, you know, maybe as a subjectivity can, start to, implement the controls that we wanna see, and that allows us to feel comfortable offering more competitive rates.

Is that like a, like, HR support or something like that? Yeah. Yeah. I mean, it’s mostly on the EPL side, I would say, which is where people need it the most, especially So most of our clients are venture backed startups.

They’re fast growing companies. They might not, you know, they might be on a on a on a EO, and then all of a sudden kind of explode and switch into their own and grow their internal HR process. So being a, an outside support system that they can lean on in the form of you know, handbook reviews and and and kind of legal support that’s sort of built into our pre our pricing, is a way that we can kind of do lost control. But also provide something that’s more of a bespoke product to our clients.

Yeah. Awesome.

Cool. Thanks. Thanks for that.

You know, so the next question I have here in in, you know, I guess this is kinda really directed to all of you, but you know, rake or Brian maybe going back to you to to lead this. I so I believe kind of MGA program biz business is is really the fastest growing segment of of insurance right now. Right? So I’m I’m curious kind of and you guys, Reika and and Carl, I think you kind of already touched on this a little bit, curious how you’re utilizing the tools kind of at your disposal right now, meaning, you know, reinsurance co capacity versus the reemergent kind of London marketplace, surplus lines capacity, central new Asian market capacity, etcetera, to to adapt and get better in this environment.

I don’t know, Rick or Brian. I I don’t wanna do wanna start that yet. Happy to happy to jump in. I I think The biggest, I think any of us is as MGAs, MGUs, intermediaries, the biggest tool you have at your disposal are your current partners.

So What what can you do to do more with the suppliers you have? You already have, you know, if you’re doing your job well, you’re doing your job right, and capably, you already have built in loyalty support and track record. So rather than going out and trying to secure new capacity, which is important from a diversification standpoint, but I think carriers are looking to do more with fewer partners. We’re definitely seeing that trend.

Just like we as MGAs would like to do more with fewer brokers if we could. You know, agency management wide distribution can be really unwieldy and difficult to manage.

So I think trying to do more whether it’s going deeper in terms of adjacent niches to what you already do. You know, we’re in social services. You either go to business, cellaneous medical allied health or healthcare or skilled nursing, you know, those are all adjacent to human services or downstream energy. Do we go into alternative energy?

Do we go into oil and gas? Do we go into gas stations and see stores. Right? So looking to figure out how do you expand your core.

I think, reinsurance support, as Carl touched on, you know, we’re we are looking to get deeper and deeper in the supply chain and getting to know more and more of the established and merging reinsurance partners that are out there. So we can put, you know, two, three players on a quota share basis together and bring it to the primary market and say, we’ve got the support. Are you willing to take a, you know, anywhere from a ten to forty percent net position? We’re not a huge fan of a pure front.

It definitely has its place, but I think, we’d like to do more and more of that and hence we’ve hired people on our team that have those reinsurance relationships and understand how to put, reinsurance in place. We’re definitely seeing London come alive for the right opportunities.

I think they were back on their heels for a bit, and Carl probably knows this more intimately than we do. We deal with London, on some of our crisis paranals coverage, whether it’s workplace violence, kidnapped, ransom, political risk. We’ve got some cyber in London, and we just secured a fifty million dollar line slip from brick. So if you can get the capacity, take it now, and figure out how to deploy it later. Right? And I think staying on top of the news, there’s a lot going on in our industry, both on the carrier side, the front side, the reinsurance keeping your ear to the ground with your re reinsurance intermediary relationships, who’s launching, what teams are moving, who’s raising money, I think the holy grail for an MGA is getting a lead on a carrier that isn’t in the marketplace and securing some sort of exclusive from them. So staying present and what’s going on is really important.

Yeah.

Good stuff. One one thing we had to rake right there is that’s really Yeah. That’s been helpful for us to kind of just similar idea though. We’ve we’ve we’ve done, you know, a good bit of work of building relationships with the Lloyd’s DA team and just kind of avoids the Lloyd’s team itself.

And they’re helping us, you know, that helps us find capacity that we made on the teams. It’s just kind of another new source for but just an idea. But And the and and sorry, Carl. With the DA team, what is the DA team?

The the delegated authority team. Oh, got it. Got it. Yep. Yep. Yep. Yep.

Got it.

Only thing I would add is is just the fact that, you know, I think I think we utilize all of them.

All those things you just mentioned. You know, we we have to have diversification within our own portfolio.

Especially in these times right now, you know, it’s it’s it’s our role in the in the value chain to match the risk profile to the appropriate capacity provider. Whether it’d be domestic or London or Bermuda or ILS or whatever it is. And so, you know, for us, it’s a combination of of the traditional partnerships, binders, establishing reciprocals, and and we actually do use fronting and captive arrangements today in in several of our programs. So for us, it’s just wanna make sure we’re we’re diversifying internally as well.

Any advice you guys would give an organization who’s trying to find capacity for a new program at this point in time, if at all, you know, and maybe with, again, kind of a lack of seed data.

I I can I can I can try that one?

It’s it’s not gonna be easy.

Right now. I think if you’re, you know, if I’m if I had a hundred million dollars, I would go into the program business right away. Because you you can cherry, you know, these folks are cherry picking, and they’re able to. And they should. They’re cherry picking, you know, the best of the best right now.

And they and they can do that. I don’t see that changing.

For this foreseeable future. I think number one, these these program carriers, they love data. Right? So they would love to see good lost data or or lost trends, you know, three to five years preferably.

They wanna see that you can generate an underwriting profit. And not just be top line focused as well. So I think, you know, data transparency is probably number one. And if you can establish some credibility with your underwriting tastes. You know, I think that that goes a long way in today’s market.

Yeah.

I think being able to point to, like, certain case studies as well in your organization, which I think, you know, between Brian and Carl and myself, we probably can point to programs where maybe we we had a standing start, and we were able to come up with a really good business plan and act execution strategy that shows that there’s proof of concept. Again, going back to the well of your existing carriers and selling them on a small program, a micro program, a startup program, an idea to, get into a new niche or a new product with white space, you’re gonna do that more easily with someone that already knows you. And then if you are lacking data, I think the the next best thing is find subject matter experts or people that have reputations that have built that before, attract them into your organization.

I think they can do the talking for you on what what they’ve seen, how they’ve built this, how can they iterate the product and the services to be more differentiated when they land at your shop.

And I think that goes I think our our history is still very well hung up on reputation and credibility. So if you don’t have premium, I would go with a really good person and a really good product idea.

That makes a lot of sense.

Yeah. I’m I’m biased, but do it open brokerage first and then build the line. That’s, you know, we started we started as a retailer and then worked our way into an MGA. So That was that was how we cheated the system, I guess, with the data.

Yeah. Yeah. Yeah. And that makes sense too. Yeah.

Alright. Let’s let’s change gears a little bit. So I’m gonna switch over to, to COVID because that’s that’s a thing as well.

And I’ll start with Carl, Carl, and this one.

You know, how how how is COVID impacted, you know, you in in in And I guess also your distribution partners as well, both from an operational standpoint, meaning, you know, how you had to adapt internally with structure and Zoom meetings and everything else potentially, but also from a financial standpoint, from a, you know, again, if at all, from a business development standpoint, and you know, are there are there any changes you’ve made to better succeed given these new dynamics?

Yeah.

I think distribution wise and sort of business process wise, we’ve always been sort of a a digital organization. So that wasn’t That wasn’t, not a ton change there. Culture wise, it’s definitely hard to harder I’m sure everybody feels this way to kinda keep morale when you’re doing everything by zoom, and you don’t have those five minutes in between meetings where you can go, like, bent to a coworker or, and whatnot, those little things, that kinda give you that kind of humanity and not just kind of, you know, your calendar back to back to back.

I think that, you know, reinforcing, goal setting across the team has been really helpful in keeping morale up and keeping people motivated and excited to do what they do.

It’s not a substitute for that interaction necessarily.

But it’s helpful.

As far as, what we’ve changed, I mean, we definitely kinda looked at budgets. I’d I’d think a big thing that we’ve done that that kinda paid dividends was, you know, kind of taking a hard look at marketing budgets. And looking at our kind of, you know, most ROI positive channels and and low cost high ROI channels and kind of doubling down on those and doing, you know, things that are accessible in this in in a digital world. So we we’ve always been a big fan of content marketing and being a subject matter expert.

We continue to do that. We we increased kind of our activities as far as guest posts and guest appearances on other blogs and whatnot. Well, we’ve done, we’ve definitely increase the amount of webinars we were we’ve been doing with, usually, you know, so for example, we’re, as a brokerage, we do a lot of stuff in the micro mobility space scooter share and all that. And we’ll have, you know, someone from, you know, lime or bird and then someone from, apollo in London, right, and kinda have both sides and and talk about it.

Things like that where, just bringing people together and being able to kind of have a really you know, meaningful subject matter conversations seem to have been, you know, paid dividends rather than kind of traditional SCM tactics and whatnot. Those are the things that come come to mind.

Yeah. Have have you seen an impact on on business? I mean, I I again, dealing with startups, right, I don’t know if the start up is a ecosystem. Yeah.

So as much. It’s interesting because There’s definitely been a bit more a churn than I think we were used to, in the sense of, you know, there’s some some startups that we’re probably about to go out for fundraise, and they just kind of the timing got them, essentially. Right? And then all of a sudden, VCs you know, pull back or kinda tighten what they’re investing in.

That being said, I think the past couple of years have been some of the most funds raised by venture capital funds. So there’s a ton of, you know, private money out there that needs to be deployed over the next couple years. Think that’s gonna push kind of this space through through this, you know, recession.

But I think It’s it’s, the the the companies that are getting funded are are gonna have to show more traditional company metrics of, you know, profitability and whatnot. It’s not gonna be quite the wild west that has been for a few years.

Sure.

Reika, any anything you’d add to to that?

Yeah. I mean, listen, I think everybody on the panel and everybody on the call is sort of, like, sick of talking about, COVID and the challenges, and there’s a million, right, TED Talks and YouTube videos. And and blogs going on, and and we’re all kind of sharing, the best of, you know, leadership tactics. So I won’t bore you with, I mean, We’re communicating frequently. We’re communicating often. I’m communicating honestly.

I’ve got good days and bad days and all around, and I think everybody is the same. And I think just, trying to be incredibly transparent as a as a leader is more incumbent upon us and in in you know, an imperative at this point since your your folks are not seeing you as much. You’re not on the road with them as much. You’re not getting to do a lot of the things that are making them feel connected and and good about being a part of your organization.

I think opposite, to not opposite, but on the other side of the coin from internal challenges. I would say the external challenges are around your distribution partners. I mean, I think this is still very much a relationship game. I know that’s such a cliche, but a lot of our brokers want to meet with their partners, wanna kind of have powwows and planning sessions and You gotta stay top of mind.

I mean, they’re being assaulted by, you know, thirty markets a week in any given industry that that we’re in. And so I think that is challenging.

For us being in front of our distribution partners, I know our brokers are being challenged by not getting in front of their clients as much as they would like and not getting to communicate their sale sales edge, their differentiators.

We’re seeing less marketing of renewals, which is good on one side, hard on the other, trying to pick up new new business and you’ve got high growth goals. We’re seeing brokers prospecting less. There’s just not as much in their new business pipeline.

And I think they’re just trying to figure out how do we rework the sales process and sales style in this in this new environment So it’s it’s forced us to look at our sales process, double down on retention and trying to lock things up early.

Increase on rounding out all lines. It’s a lot easier to do that than to pick up a new piece of business right now in this environment. We just hired to to Carl’s point, risk management is really important right now. We write a lot of small to to medium sized enterprise business, and so you know, we have an internal director of risk management that we are offering to most of our clients at no additional cost. So just trying to figure out how do we you know, make ourselves invaluable in in the broker sales process because that continues to be our, you know, sales channel.

Brian, you know, again, related to COVID, but but switching more to, like, a a risk containment or risk management perspective. You know, what what do you what do you see happening in the market? And how is Orchid kind of managing through containing risk through collusionary language or otherwise.

Yeah. You know, what we’ve seen, I’ll I’ll talk I’ll talk about what we’ve seen so far. And I think it’s a case of the haves and the have nots.

At this point in time. And what I mean by that is, you know, you’ve got you’ve got a lot of of carriers out there who use standard ISO exclusion for exclusionary language as relates to virus and bacteria, communicable diseases.

And then you’ve got others that, you know, manuscripted their own forms that may have some ambiguous language as it pertains to, virus or pathogen type exposures.

And I think, you know, the ones and and we’ve seen so far in in some recent court, litigation decisions that those that do have these exclusions on there. Typically, I think will come out okay.

And and the whole grand scheme of things, while others, I think, will be impacted some harder than others. But but most likely, as an earnings event. And I think most, if not all of the of the new reinsurance contracts and and the primary contracts that are going out in the marketplace right now are definitely adding a community communicable disease exclusion if it was not there, before that.

And we’ve seen some of the largest players in the market space, especially in things like special events, that have just completely exited the the business.

Leaving a a huge void in the marketplace for, for events like that and exposures like that. So I think that was a line that was particularly affected by this.

But again, our industry always rises to the top when these things happen.

So I do expect new solutions to come out into the marketplace, whether it be, you know, things like parametric coverage or some other mechanism that would protect both individuals and businesses, from this type of exposure.

Thank you.

I’m gonna I’m gonna switch again. Let’s go I wanna I do wanna hit on kind of recruiting a little bit, you know, because I I know that’s been a question of our clients a lot or that we’ve talked a lot. You know, so I’m and this is for the group as a whole. You know, again, curious if right now you’re kind of in growth mode at this point, and I and hiring overall or if you’re kind of holding steady, from an employee population standpoint. And, you know, I guess related to that, is this is the current environment kind of a net positive net negative to recruiting, you know, the best the best talent out there.

I don’t know who wants who wants to take that first.

I’ll jump in. So I I think when everything kicked off in late February, early March, all of us most of us, I think, went into a kind of trench mode of kind of let’s Let’s get tight. Let’s get under the tent. Let’s protect who’s in the tent first, and wait for the storm to blow over. And then we sort of realized, oh, this isn’t, you know, a level five tornado or whatever coming through. This is we’re gonna be reigned on for an elongated prolonged period of time. And then I think, you know, the first six months, at least for us at Tangram, we settled into, okay, we can We can keep everybody on the payroll.

We are not seeing a significant impact on revenue.

We focused on certain efficiencies that could be gained even farther. And as you know, we we utilize Pietro quite a bit already on the Indian team, and we launched in the Philippines with some new new services there. So that allowed us to continue to grow and write more accounts for aircraft and more US staff.

Now I would say, you know, we have definitely turned our eyes back in, you know, upon being opportunistic in the disruption and the challenge. And being aggressive and being bold. So that is pushing, you know, more product on the shelf, pushing more diversification with carriers and reinsurers and definitely pushing to expand the team and make the right hires.

You know, on the recruitment standpoint, we are not really hiring newbies into Tangram, our business model is not set up to really foster that kind of training and growth, and we recognize that over time.

You know, our sweet spot is somebody that’s been in the industry at least three to five years. I know that’s probably a lot of people’s sweet spots, but for us, in particular, we know that’s that’s really the the minimum bar for us. And then, you know, we’re just looking to continue to pay a premium for people that specialize in in industries. I mean, that’s what it’s about for us. We’re few things to few people.

And so we’re back to really keeping our eyes out for those kinds of people in attracting them into the organization and making an investment in that.

Yeah. I I think we’ve got a very similar story as Rayka does with with her and her and her company, kind of pausing and and really getting underneath the hood and seeing What do we need to do differently when this all started?

Looking at process improvement, utilizing, groups like Patra as well. A lot more than we had in the in the past.

And then, I would say we’re we’re definitely growing. We’ve got some pretty ambitious growth goals as as an organization.

And, I don’t think, I don’t think COVID’s gonna gonna stop that. So for us, I think we’re growing, I would say, commensurate with how the E and A DNS space is growing, and we’re growing with that. So if that’s growing at a, you know, twelve to fifteen percent clip, I think that’s gonna be similar growth strategy, for us at the same time. You know, the this did this this really hasn’t hasn’t hurt us. From a business perspective, you know, submissions for us are up forty to fifty percent, over last year at this time. So I think for us, you know, we don’t have a choice, and and we just need to find, better processes and better ways to utilize most like Patra and and other ways to to grow the business.

Hey, Brian. I’m just curious. Is that your is that within your group, or is that Orchid overall? Is is Yeah. That’s that’s gonna be orchid overall. For me, it’s probably a little bit higher than that, actually, but for orchid overall, it’s about it’s about the same. Wow.

Yeah. I mean, kind of the same story over here as far as, pausing and kind of, you know, doing some analysis, making you know, making sure, we spend wisely for a bit.

I think going back to the the, you know, our first topic on capacity, and how, ML capacity. Management liability capacity has has is tough to come by. Having it now you know, that’s market wide. So having it now and seeing sort of legacy players in this space pull back over even before this, you know, over the past couple years.

Was really actually ended up being advantageous for us as, you know, management liability underwriters with only, you know, three years of of, you know, our book started in two thousand eighteen. So it actually kind of accelerated the submission rate for us from our partners.

Patra actually helped us out quite a bit when we were surprised to be understaffed very quickly over the summer. Which we’ve now caught up with. But, yeah, we’re we’re on the we’re we’re on the aggressive growth train now as well. That’s the goal. So Yeah.

And I pre I appreciate the plugs guys. Those were unplanned. I promise to the audience there.

You know, and so I guess it kinda continuing on that. Like, I know at Patra over the last, seven or eight months, we’ve we’ve been, you know, we’ve onboarded hundreds you know, both domestic and international employees, and overall it’s gone well, but it it it’s been tricky at times. Right? Say the least. So, you know, doing things over Zoom and group trainings, etcetera.

Curious if any of you have, you know, your experience regarding onboarding, new employees, and and how how you’re adapting. And I guess kinda related to that, just overall keeping up morale. And and some of you hit on this a little bit, but, you know, is that an issue? Or what what are you doing?

To get in front of that?

Yeah. I’ll I’ll I’ll start you know, similar to Rachel, we we we probably aren’t in the in the business model of of the newbie hires and onboarding then just because we’ve got some significant goals, and we have to do it in a relatively short period of time. But you know, for us, I think the biggest piece of the onboarding process, is the challenge, of of the virtual training.

It’s really hard for us to to help these folks get ingrained in our culture over Zoom meetings.

And I and I think that’s been a big challenge. We’re getting better at it every day as we go, but I think that’s been for us, I think that’s been the biggest challenge when onboarding. These new employees, it’s all done, virtually back in the office. Today. We’ve got a very limited amount of people that actually do come in the office, and most people aren’t comfortable doing that yet. So more lunch and learns, more one on one training, and really just trying to engrain the culture in a lot of these new hires.

Yeah. We I mean, we we have a blend of people coming in with experience and people coming in with no experience. We’ve traditionally like to train people from scratch, because we found it to be sort of advantageous in the sense of if you’re not coming from the industry, you think differently and you might solve problem differently than if you’ve been in it for, you know, five years.

Which helps us build and innovate, you know, as far as technology goes and processes and all that.

To be honest, it’s probably too early to tell you, you know, how it’s working out. I think the things that we do to, do our best to ensure it does is, kind of pairing up with a, a mentor pairing up with sort of a a buddy. To do regular check ins all the time.

We use gant charts in sort of like a twelve week, very, very clear defined goals per week just to make it kind of a very, very defined process of onboarding.

So there’s no sort of confusion. Try to provide as much clarity as possible.

And one of my favorite tools that I’ve discovered to this is is actually a Slack add in called donut. Which is pretty great. It just automatically pairs people for virtual coffee across teams. So you’d kind of once or twice a week, you have a meeting with a random person on the team.

They also have sort of built in onboarding where they’ll pair you up with them. It sort of automates a lot of the, kind of making sure new people meet everybody on the team, it sort of automatically introduces and schedules people. So that’s been kind of a a a fun discovery and you know, it’s not it’s not the real thing per se, I guess, but it’s it’s it’s helpful for sure. Proact proactive way to stay in front of it.

Yeah. It’s it’s called donut.

Yeah.

Very cool. Dot ai. Yeah. Yeah.

Good stuff. Rick, anything to add to that or or, actually, I think in the let’s I’m I might just move forward to in just kind of in the period of time here to to technology.

Carl, let me start with you again on this. So so, you know, tell me generally, like, kind of I think I think the audience would like to know just generally kind of how you’re using technology or what you’re using it for, right, as well as kind of what your builds by partner strategy has been historically. If you’re Yeah. I you’re able to share.

I think our our general process has been, Bill, it’s kind of, I guess, I’ll call it a combination of build by use out of the box tools to kind of build the packed version of what I want to accomplish with the technology. Right? So I’m a big believer of, kind of, like, Pareto’s law, like, the eighty twenty rule. Right?

Like, if you get eighty percent of the functionality for twenty percent of the cost, do that. Right? Because you don’t know, you know, to kind of, you wanna test things and see see how they work. So, you know, we have, we have we generally use Salesforce on the back end.

Which was a a clear buy because it’s it’s customizable enough to do what, do what we need to do, and we continue to we can build on top of it, but it’s not building from scratch.

And it was more customizable than other kind of AMS tools out there. We built a a custom app that, is client facing to go all underwriting data, and that kind of ports into our back end system.

But we ran through multiple iterations of kind of like type form types, you know, tools.

And it’s helpful to iterate through using those out of the box tools just because it’s a low cost way to test your marketing hypothesis in my in my opinion.

As far as partnering goes, I mean, we generally partner with folks like Patra where, there’s a human touch involved. I think that’s the best time to partner. I think we lived personally in the products that we sell in a space and to the clientele that we sell it to, selling management liability to, you know, founders or c suite execs that, just, you know, received a big check from institutional investor. They live in an area where kind of you picture, like, a consulting matrix two by two of high stakes, you know, high information asymmetry.

There’s a lot of information out there. The stakes are high because you don’t wanna mess up, protecting your company. And I feel when you live in that quadrant, we want a human touch. So, we partner with, you know, people like Batra, like you guys to, keep that human touch there, but still keep the cost down.

So whether it’s, you know, document delivery and helping us with that, and, you know, double checking, you know, things in our system and whatnot. That’s where we keep the human touch. So Like, I’m curious of your perspective if you’re able and willing to share technology. Just overall.

Yeah. I think we’re a little behind Carl because, you know, the complexity of the products that we underwrite, especially package lines and workers’ compensation, We’ve we’ve had some things to solve around, delivery and synchronization with our carriers and their openness to, partner with us on our digital journey. So it’s been a little bit all over the place depending on who’s invested in that specific niche and, what the incentives are, are they aligned?

Absolutely. We know that our data to be organized, and it needs to be, portable. And we need visibility to gain business intelligence at any given point in time. We are not a hundred percent there.

The way that we pull things together, still can be quite complex and manual. And so I think for us, we’re still on this journey to really get to a data warehouse.

That can serve us better. And I know the team will take a big sigh of relief when when we finally get there. I would say we spent a good amount of effort on our digital journey. You’ve been a part of it, Greg.

You know a little bit about it. We have, had some stops and starts and learned and tried to fail fast and and take that to the next, the next iteration of what we do. It’s it’s almost like We’re flying this plane and we’re trying to improve the plane and add some turbo speed here and there, but the conditions keep changing. And so what we thought we needed, we didn’t need or how we were gonna get there.

We’re trying we’re getting there differently. I think the evaluation for us has been, do we will romanticize this startup technology platform where we can build it from scratch, and it will be everything we need it to be and more, the hundred percent, right, that, that that is less than what Carl was talking about versus do we get to seventy five or eighty percent with something that’s mature and proven and maybe less customizable can we live with that.

And I think I’ve had to think deeply about that because I’ve definitely gotten romanticized at building, you know, proprietary technology, but on a beer budget. Right? I don’t have a million or two million dollars to spend, and I don’t know how many of your vendors or MJ partners on this call have that to spend, but that’s not we don’t have a budget like Arrowhead has. Right? So I think and your technology is fantastic. I also think I’ve come to the reality that sometimes multiple solutions that are really good in different parts of the delivery and distribution, like somebody’s really good at CRM and and broker portal work. Somebody’s really good at at policy management.

Then there’s another tool out there for business analytics and dashboards and reporting. That’s okay to have multiple system work together. And I think my mind for a long time is very linear in this aspect and thought, I’ve gotta have a single enterprise system that works. And I’m starting to expand that idea a little bit more.

And it’s it’s good to hear you’ve come to some of those conclusions. It’s it’s Yeah. It’s it’s a good point.

Brian, I know you guys have a robust technology approach as well. Anything you’d you’d like to add Yeah. You know, just not a whole lot. They’ve they’ve done a really good job at at at covering a lot of things. I think for us, it’s it’s we use technology for data enrichment analytics, you know, Rick and met she mentioned the the data warehouse. That’s something that we were almost done with ours.

So, to to her point, we are super excited about being able to use their data warehouse, to get a lot to deeper dive into our business. And we’re awesome. We also use it for the customer journey. As well as process improvement. I think the only one thing I would say is, you know, for us, it’s the the biggest thing is really to define the process first.

Once you have that done, then we go out and look for partners or vendors, or do we build, do we buy what do we do so that, you know, we can work with that to streamline those processes and and digitize and automate as many of those as possible, whether it be using folks like Patra or or others who who will do some data enrichment for us. So I think that’s the biggest thing again is we gotta define the process first. And then you can work from there.

Yeah.

Alright. I I’m gonna see if I can get one or two more questions in here before we actually take questions from the group. I think I have to ask a, you know, kind of ensure tech question. Again, it’s, you know, or whatever six years into this whole ensure tech, revolution, I guess, is what people call it.

Brian, I’m gonna go back to you. You know, how how much time are you spending on the evaluation of insurtech at this point? Right? And and have you have you developed any thesis? Like, I’m sure it’s probably changed over time, but we were at today on that. Yeah. It seems like seems like it’s all I’ve been doing lately is evaluating share techs.

There’s there’s a lot of them out there, right now. I think some are a lot farther along than others.

But, you know, every decision that we make today is is heavily reliant on data. It’s data driven.

So we’re constantly looking for partners to help differentiate us.

To both our carry partners and our distribution partners.

And I think, you know, after after talking to a plethora of of insurtechs, you know, there’s so much out there that they can do. It’s almost data overload, or ensure tech overload for me. And what I’ve what I’ve learned is that I’ve gotta be really precise and focused on what specifically, I’m trying, you know, problem trying to solve or what process I’m trying to improve.

Otherwise, it’s really easy to go down a rabbit hole, with insure techs and and getting hammered with every new shiny nickel that you see, you know, coming across the the internet these days.

Yeah.

For all of you, has has has there any, tangible POCs or partnerships that your organizations have been involved with that have really, been successful at this point that you’re willing that you’re able to share.

I mean, yeah. Yeah. We we we partnered with, with a few so far that have, significantly enriched our data, and then I’ve improved the underwriting and risk selection process.

And I think it’s been a big differentiator for us when we go talk or reinsurers, and and new potential capacity providers.

They really like what we’re doing from a from digitizing the underwriting process and optimizing at point of sale rather than, post bind, you know, six months later, twelve months later, we’re doing it before we send the quote out, and I think that’s really important to them.

Yeah. So that time you’re spending there is worth is worthwhile. It’s actually paying off, obviously.

Yeah. Yeah.

That will just add that we’ve optimized the intake. Right? I think there are brokers that don’t mind inputs into a system, in lieu of a supplemental and, and, you know, and I think if the if the reward can be, and maybe this is closer to Carl’s business, on the management liability or the EPL side. If you’re delivering a monoline product and the reward can be a tangible, bindable quote, at the end. I think there is a real incentive for a broker to go in and put all that information in. For many of our products, we’re not able to do that unless it’s something as easy as kidnapping or cyber. They’re generally not gonna get a seven or eight, you know, lines of business quote on a downstream energy.

Operation, that’s three hundred thousand dollars, because our average premium size is a hundred and fifty. Right? So that stuff is not gonna be under it in ninety it. And we’re not gonna get them to basically input all of that information.

So we’ve invested in, a couple of vendors that do work around machine learning So we can grab all of their static information and put it into the underwriting tools that would normally take, you know, the elves, whether it’s Patra or, you know, our junior underwriters a lot of time to put all of that, that that data in. So, you know, we’ve we’ve we haven’t put the burden on the broker, but we’ve tried to, sort of lift the burden from our underwriting team and and automate that quite a bit more. And I think outsourcing is a really great sidestep towards automation. For us, the way it’s worked is anything that can be automated from the start, we’re gonna do that.

Anything where we need to think about the partnership or we need to get into a longer term understanding of how technology can help we’ve utilized Patra as sort of a mid step to that automation journey.

That’s awesome. I definitely I definitely agree with that.

Process. Yeah. We I mean, we’ve always been focused as a company on on underwriting data intake preferably direct from the the insured and built our own proprietary app, actually are now phasing it out for, a new vendor that we actually it’s an insurtech company that we we rolled out about three, four years ago, that are now venture backed doing their own thing.

And we, you know, we have a couple of tools for data enrichment, but mostly, they’re actually more geared towards venture capital data rather than, you know, lost data, just because that’s what helps us, you know, make our decision. It’s just fits our client’s home. So Yeah.

Good. Well, I think, you know, given given the time I’m just gonna I’m gonna kinda short circuit and and wrap up with one final kind of rapid fire question for each of you guys.

You’ve shared a lot of really good information. I think I I think it’s gonna be really, valuable insight to the audience today. What what’s kind of one, you know, one or a few kind of final, pieces of advice that that you’d offer in GAs today that are are are more growth focused and looking not only to survive during what is a a a, you know, a lot of people consider a challenging environment, but also, you know, thrive thrive in this environment. Just go kind of around around the room. Maybe Brian starting starting with you.

Yeah. I mean, there there there’s lots lots of things, to to do out there. But, you know, the only advice I really have is is transparency with your partners, and that’s your your distributors.

At your carrier partners, your reinsurance partners. That’s really important, and especially during this time, it’s consistent communication with them. And, you know, and be transparent with the data too. That’s that’s extremely important. And and more important, and most importantly, probably embrace all the tools that are out there, at your disposal.

You know, to make sure that you’re improving your risk selection, and really importantly, you’re differentiating yourselves from from others.

Awesome.

Carl, how about you?

I mean, going back to something Rekha said earlier, just given market conditions, I’d say, you know, be resource efficient where you have capacity and maximize the usage of it.

Figure out ways to kind of, you know, expand your appetite without expanding your appetite.

And for example, we do venture back startups where we started doing certain, sports associations because they’re closely held entities just like, you know, venture backed private companies.

So things like that just get creative. Right? I think And I I would say don’t don’t don’t be a generalist, you know, own your niche, and kind of to, like, you know, really, really own the space that you’re in and become a subject matter expert because it’s only gonna lead to more business from, you know, referrals and just, becoming the household name in that in that space. I think those are two great ways to grow.

Awesome. Perfect. And, Reika, we’re we’re short on time, but quickly, what’s what are your final, pieces of wisdom?

Yeah. I mean, I would say this industry and and specifically the the interm the intermediary seat is not for the faint of heart. I say, like, be in your business like we should be in life, like be bold, deviate from your norms. Now is the time to try some things and push some boundaries.

I think if you are looking to erode your earnings, understand what are the gains that you’re trying to make on your top line. So in other words, like, what investments are you willing to make right now short term pain, long term gains in terms of growth.

Distribution is king. A lot of insurtechs have tried and failed. It is a high barrier to entry. Focus, focus, focus on your distribution.

Make that tight and make that right. Understanding what you need. Do you need more product on the shelf? You need more distribution.

If you need more product on the shelf, focus on underwriting. If you need more distribution, focus on sales. And then I think finally, you know, have a vision you have a long term vision eight to ten years out, that is gonna drive what you do inside of every quarter, every year, every three years, every five years with urgency. And that’s gonna give your team something aspirational and inspirational.

Really good stuff. Really good stuff. Thank you all.

Henry, I know I promised you I wouldn’t go over and and I did. So, hopefully, we’re doing pretty good on on questions.

Any questions that you wanna pose to the group from the audience? Sure.

The the first one that I will pose, and this was posed to all panelists What advice would you give to an insure tech to make things easier for you in terms of approach, narrowing focus, etcetera?

I mean, There’s this there’s this phrase that does always stop with me that I think is from an interview in this book Tools of Titan. It’s in Ferris book, but it’s it’s kill your darlings, and it’s basically, like, there’s things that you always wanna do because they sound greater seem great, but they’re not a practical thing to do right now. Like, I remember, in our in our very early days, we struck up As a on the retail brokerage side, we struck a a partnership with, with a HR PEO company that they were gonna feed us all of our comp. And we just did not have the processing capacity to deal with it, and the unit economics were pretty terrible.

And we just had to kill it to focus in on you know, the the the sales that actually made a difference, for us. So, you know, I would find those things that, like, look great on paper.

But in practicality, are are just kind of if you’re being honest with yourself a waste of time and and kill them.

That’s that’s easier said than done though. Right? Yeah. Yeah. Because everything looks great. And it takes it takes the work.

It takes doing the work to really figure that out. Yeah.

I would say, you know, whether you’re on the BPO side or you are at an ensure tech, you know, we are a a hyper growth stage MGA that does not have a resident CTO or big technology team. It’s really important that you have, insurance people that speak our language that are in your business. I don’t have time to educate you on my business. I don’t have a lot of time to teach you the ins and outs and the jargon and make sure you understand all the connection points.

If you already speak that language, that is worth something to me. I need to start on the twenty or the fifty yard line, not, you know, at zero. And I and I think the partners that we’ve had incredible conversations with and a lot of creation with are the ones that really come with an understanding of, like, oh, I understand what a program administrator is. I understand what your value is and where you’re trying to go, and the unique challenges you have in terms of sitting between you know, the supply side and the distribution side.

And it’s it’s it can be more complicated than a lot of people think. Right? Understanding the psychology of an insured is often different than understanding the psychology of an agency, etcetera, right, which I found a lot of times our, organizations can underappreciate right off the bat.

Good stuff, Henry Rodam. Why don’t we get to get to another one?

Okay. This was also put out to all panelists.

All of your organizations are currently on admirable growth curves, and there’s been a lot of discussion around the market. Is there one facet of the current market that keeps you awake at night?

That’s a really good question.

I’m gonna go with capacity if I if I’m gonna choose one of them, but Yeah. That’s that’s that’s probably the the most obvious one, right, is is definitely capacity.

And what that looks like you know, moving forward next year or even even the year after.

I mean, that that keeps, I think, everybody up because without capacity, you know, it’s hard. It’s we’re not growing. Right? So for me, I I would I would have to agree with that. It’s it’s capacity, but that can be, you know, many different forms. I think for for me, it’s how do we diversify, you know, I think that’s important for any growth organization.

You know, Rick mentioned she was in all these different niche markets.

I think that’s imperative. I think it’s hard to grow if if you’re only a single line of business type, entity.

So I think diversification is is probably the next biggest one. How do we diversify?

Even more than that today. Sorry, Brian. That’s okay. I’m done.

I think in my perspective, the bigs are getting bigger. Right? There continues to be rapid and enormous consolidation both on the P and C side and the brokerage side.

To me, that does represent enormous opportunity. It represents enormous challenges. One, it’s not good for our industry. I think P and C lags behind every major industry in the world around innovation, and just keeping up with the curve, and we’re slow to adopt.

And, unfortunately, a lot of the big guys on both the distribution side and the carrier reinsurer side still control a lot of the information and still hold a lot of the keys to the kingdom. And I think finding ways to, like, unlock that land grab, and sort of, right? I mean, get them out of the hands of just like in the technology worlds. I mean, it’s like Facebook, Google, Amazon rights control by four players.

And I think we all know who those players are for us on the distribution and the and the carrier side. And and I think, I just I worry about that consolidation and that sort of monopolistic group think. That’s happening and impeding, innovation, creation, and responding, responsiveness to the emerging risks. I mean, the pandemic and cyber attack and climate change have uncovered enormous insurance gaps.

We need product.

And and if people refuse to sort of innovate, our our insurance industry is doing a disservice to kind of what our premise of existing really is.

This is excellent. I I hate to end kind of on the on the on the more negative note, but I think this is fantastic. I’m sorry we didn’t get to more, more of the questions you know, from the group. I I see there is quite a few coming in now.

But thank you all. I thank you so much to the panelists. I thought it was it was excellent. I I think that, everybody’s gonna get a lot out of this.

I wouldn’t be doing my job if I didn’t include a quick, shameless plug on Patra before we wrap here.

Patra is a leading provider of technology enabled solutions to the insurance industry. Patra provides insurance processing by optimizing the application people and technology, supporting MGA’s carriers, wholesalers, and retail break brokers as you sell, deliver and manage policies and customers. Our MGA carrier wholesale specialty practice is one of our fastest growing, and we’d love to talk with you. So please visit us, w w w dot corp dot com fill out a form, and we would be happy to get back to you. But guys, again, thank you so much for joining today. Hope everybody has a fabulous rest of your day, and, we’ll talk soon.

Webinar: The Top Challenges Facing MGAs Today

Executives from Tangram Insurance Services, Orchid Insurance and Founder Shield joined Patra to discuss practical ways for MGAs to stay ahead in today’s rapidly changing, turbulent marketplace.

Rekha Skantharaja
President & CEO
Tangram Insurance Services
As President & CEO of Tangram Insurance Services, Rekha has the privilege of building an independently owned, privately held company on her terms. Tangram architects and distributes specialty insurance programs in niche industries across the U.S.

Under Rekha’s leadership, Tangram has experienced accelerated financial growth and cultural transformation over the last 10 years. With a majority female executive team and staff that includes veterans and minorities, she is proud to be scaling a company that is challenging the status quo of the insurance industry. Completing the team’s first strategic acquisition last year and expanding several core programs, she is piloting an audacious climb to hit the one-billion-dollar mark in 10 years.

Bryan Schofield
SVP, Commercial Lines
Orchid Underwriters
Bryan Schofield serves as the Senior Vice President of Commercial Lines for Orchid Insurance. In that role, he is responsible for P&L, product design, pricing, underwriting strategy, and distribution. Prior to Orchid Insurance, he served in several leadership capacities at Bankers Insurance Group, including Vice President of Sales where he oversaw geographical expansion into 14 states as well as the growth of marketing and sales distribution. Earlier in his career, he worked in a variety of executive capacities at Travelers, Markel Corporation, and State Farm.
Carl Niedbala
Co-founder & COO
Founder Shield
Carl Niedbala is the Co-Founder and COO of Scale Underwriting, an MGA and program manager focused on niche markets, and Founder Shield, a digital insurance brokerage providing commercial risk management solutions to high growth companies. Prior to his insurance life, Carl worked for several venture-backed startups and venture capital funds.

Details of this webinar:

Presenter:
Greg Morris, SVP Business Development
Duration:
59 mins, 09 secs
Publish Date:
October 12, 2020

In this recorded session, we will dive into the following topics:

  1. The marketplace – staying ahead and succeeding in a difficult market
  2. The operational impacts of COVID – evolving in unprecedented times
  3. Overcoming recruiting challenges – attracting and retaining qualified talent
  4. Embracing insurtech – best practices to understand and embrace the benefits of insurtech
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