For most specialty MGAs, wholesalers, and program administrators, the retail broker channel is quietly costing seven figures a year. I find where and fix it.
Most "Producers" in this industry struggle (to actually "produce" new business)...
When you solve this problem first, everything else downstream takes care of itself:
lead generation, building a prospect list, full sales pipeline, getting BOR's and growing your commercial book๐
Great idea. Maybe I create an MGA ecosystem map, then assign each brand a cool IPA, lager, stout, blonde ale, etc. label. ;) I do agree, specialty wholesalers are in a stronger spot right now than most in the industry assumed. Most specialist retail brokers still want more market options to bring to clients.
I equate what's happening in the specialty MGA market right now eerily similar to what happened to the craft micro-brewery industry over the last 10 years.
Big BOOM, most brew master/owners (underwriters) had a great specialized/niche product, but had no idea how to run a business nor did they learn how to master distribution (broker channel), marketing, content or sales.
Then, commoditization of the micro brew industry started to happen due to more competition and the fancy labels on their product weren't cutting it anymore.
Most went out of business instead of staying "local" versus trying to go big nationally, or they were bought out by one of the "big guy" breweries who had massive distribution already in place (and great marketing).
The most expensive hire in your MGA is the audience you never built.
Every day you stay invisible, the broker calls someone else and the good risk goes somewhere else. AI made the product easy. Being known is the whole game now.
Build a media company that sells insurance.
Every broker-led specialized MGA needs to work with elite specialist broker partners because their products are often so specialized that generalists structurally can't sell it well.
And, specialist brokers have more trust and respect with the insured because they're the recognized expert...
So when an MGA becomes the go-to market for a specialist, the win-rate compounds. And, they get immediate lift in quote-to-bind ratios โ increase in revenue and enterprise value.
Working with elite specialist brokers is the greatest lever to pull for boosting enterprise value and your multiples (at exit).
Our specialty MGA client data proves๐
At typical specialty insurance EBITDA multiples (8-14x), every $1 of recurring revenue lost to broker partner weakness suppress enterprise value by roughly $10.
Distribution weakness isn't a marketing constraint. It's a valuation problem.
The MGA founder (typically an underwriter) who says "I have great relationships with all my brokers" is one departure away from losing $ 3-4M of their book.
Relationship-only distribution = key man risk.
Content + systematic broker enablement is the only durable defense.
Thereโs so much AI โnoiseโ out there. What the โsilentโ 1% elite are doing while everyone else is still consuming and strategizing?
Executing.
If you're a retail P&C or benefits broker, I'd spend 80% of my time learning and mastering the skill sets of how to sell, build relationships, forge strategic partnerships...and about 20% of my time on AI. The AI "you'll miss out" thumpers have you convinced to do the opposite.
MGA founders, leaders, & investors... insider intel: When you see Ads for "Industry Guides and Reports" that have other insurtech 'influencers' giving their perspectives and insights inside... there's a 99.9% chance those 'influencers' are PAID. Objective? You decide.
A hard or soft market should never dictate your distribution strategy as an MGA. If you pay attention to the noise in the marketโฆ You lose total control over your business modelโฆ and the market controls you.
All of your competitors are dealing with the same market as you are.
@Zrayrayallday Ahh, now I get what you meant by โaccessโ, you werenโt talking about access to UW talentโฆaccess to talk about submission/each risk. I agree 100%. Funny how UWs complain about brokers submissions and brokers complain about UWs not getting quotes fast enough. Itโs all about comm
@Zrayrayallday Possibleโฆbut a majority of them are former UWs or also UW for their MGA. Iโd argue most MGA founders donโt know how to scale either the generalist or specialist broker channel, nor how to sell, market or create content. Relationships arenโt enough anymore.
@bluehose35 Interesting take for sure. I do feel like the more they removed the 'human' touch points, sacrificing quality (customer service) for speed (quoting), negated the net gain or perceived gain from that speed to quote to bind aspiration. Broker behavior is the real constraint, IMO.
Carriers, wholesalers, and MGAs are patting themselves on the backs โgoing all-inโ on AI & tech to make it easier for brokers to submit-quote-bindโฆ
Shouldnโt that have been that way all along for the last century?
Theyโre focused on solving the wrong problem.