Working with a managing general underwriter can be one of your most beneficial relationships, helping you build your book while addressing your clients major insurance issues. And selecting the right MGU partner is important. Below are six attributes to look for in a prospective or current MGU:
1) Knowledge MGUs are often specialized and have a higher level of product expertise, or a greater comfort working in specific geographic areas or market niches, than a carrier might. For instance, an MGU may have more experience dealing with stop-loss medical coverage, a risk that has become a top concern recently. When working with a client who has specific needs, an MGU may be able to provide more value than a carrier with broader, general knowledge.
2) Speed and Flexibility Speedy and accurate claims handling, flexible underwriting decisions and reliable communications should be a given when working with carriers or MGUs. Unfortunately, thats not always the case. Choose your partnerships wisely by asking for referrals that demonstrate the skills, expertise and responsiveness you want in your relationships.
3) Creativity Competition has commoditized most insurance products, making price a non-issue within many lines. All risks, however, are not the same. When presenting unusual circumstances to a major carrier, especially those who operate within strict guidelines, the insurance your client needs may be unaffordable or even unavailable. MGUs are more likely to get creative when structuring programs and in some cases, may be able to customize a program to meet a clients unusual circumstance.
4) Intimacy How often have you tried to talk with a decision-maker at a carrier to speed along some business, only to be rebuffed? MGUs offer brokers a smaller company vibe with more ownership and accountability. With an MGU, you are more likely to have direct access to underwriting and claims managers without the hurdles you might experience at a carrier.
5) Empathy Because MGUs typically operate with an entrepreneurial spirit, they enjoy working with brokers to understand a clients entire risk portfolio. Good MGUs will roll up their sleeves and dig in to truly understand a clients needs. This holistic approach can open doors to new business.
6) Financial Strength An MGUs financial strength must play a role in any decision you make, so make sure the MGU you select has a profitable track record. Equally as important are an MGUs carrier relationships and their insurers ratings. While many lines of business may be commoditized, a slightly lower price is worth little if a carrier struggles to maintain decent financial ratings or if loss ratios regularly exceed industry norms.
Partnering with the right MGU can give you and your clients a level of service that you might not expect from a carrier. Taking time to select the right MGU will lead you to a long-term partnership that can benefit both you and your clients.
Fleet is president of AmWINS Group Benefits, a wholesale broker of comprehensive group insurance programs and administrative services. He can be reached atasksam@amwins.com.
