Insurer Hosted Pricing for MGAs

Every managing general agent know that the market is tough at the moment, despite evidence of green shoots, capacity is tight and margins are constantly squeezed.

In this environment, the MGAs who thrive will be the ones who can launch the right products with speed and precision.

Unfortunately, the traditional way of launching products is anything but fast, relying on a convoluted process with lots of back and forth, keying and rekeying and referring to underwriting guides. That’s before anything can be converted by a rating engine in a policy administration system.

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In summary, the traditional method can create a range of challenges for entrepreneurial MGAs which include:

·        Lack of central management of products

·        Management of multiple channels

·        Distribution on different cadences

·        A typical six-week cycle time from software providers

·        Lack of visibility of quote performance on distributed channels.

However, there is another way – Insurer Hosted Pricing (IHP).

This allows insurers and MGAs to build their products once and store it in the cloud for easy access by broker partners and greater pricing sophistication.

Insurer Hosted Pricing is when an insurer or MGA hosts its own rating and underwriting engine (usually in the cloud), and price comparison sites or brokers connect directly to it in real time to get quotes. This contrasts with traditional setups, where intermediaries (like aggregators or software houses) store and run the insurer's rates on their own systems.

As you can see it’s a much more streamlined system and it offers a number of additional advantages:

·        Speed to market

·        Build once, deploy anywhere

·        Empowered and self-serve

·        Open architecture to enrich your products

·        Access to your data.

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The technology offers MGAs real-time control over their pricing and empowers stakeholders to self-serve. Furthermore, the open architecture allows for easy product enrichment, for example, if an MGA wants to add machine learning to help improve underwriting processes it’s a simple add-on rather than a long, drawn-out process. It also means MGAs have a ready-made pricing solution to share with new partner brokers.

Open GI can support MGAs interested in developing an IHP solution and we’d encourage them to take the leap. Ultimately, the technology means better pricing control, easy updating of rates and improved risk selection thanks to the access to data and real-time modelling.

Furthermore, the technology can help MGAs avoid data leaks and maintain control over their intellectual property.

There is also evidence that it can support MGAs with regulatory compliance because the ‘one and done’ model means it is easier and faster to demonstrate transparency and makes for a simpler audit process. The method also enables MGAs to offer more personalised or usage-based pricing, which can act as another commercial advantage.

There’s a host of benefits to developing Insurer Hosted Pricing – get in touch to find out more about how Open GI can help.

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