5th May 2023
As thousands of brokers and insurers prepare to head to Manchester for the annual BIBA Conference, Chris Butcher Executive Chairman – Intermediary & Market Services at Davies, explains how the event remains a vital part of the market’s ability to identify and define its response to current and future risks.
For many in the market the BIBA conference provides the opportunity to discuss the issues which affect the market, but it also creates the ability for conversations which do not occur outside of the conference setting.
The event allows the Davies team to meet with brokers, MGAs and insurers to discuss the current state of the market. In our role to support the creation of MGAs the conversations with insurers are predominantly between the MGA team and the brokers. Biba allows me to meet with insurers to discuss their strategies, their approach and their appetite for current and future binder and delegated authority business.
Those insights are key when we are collaborating with our clients, particularly in the current phase of the MGA cycle. The MGA market is still fairly buoyant but the past 18 months has seen a tightened level of capacity for delegated business and the situation did not improve by the 1/1 renewals.
It is a cyclical business and at present the tough conditions are likely to drive further consolidation within the market as scale is becoming increasingly important.
While there has been a tightening of capacity, there are new players entering the market and from Davies’ point of view none of the MGAs we work with have been forced to exit a business line due to the inability to access capacity.
Regulation remains an issue for MGAs. Despite the ongoing public statements from the Treasury of a new post-Brexit regulatory environment which will be less onerous as yet we have seen little from the Financial Conduct Authority that points to any easing of the requirements.
Indeed, the FCA and PRA continue to look to redefine their approach with an accent on greater oversight and with it comes an increased cost and demands on staff time. That has seen an increase in MGAs which are delaying their move away from AR status to a fully regulated entity. We would normally see an MGA look to become FCA authorised after three years, but due to a range of issues such as the pressure of regulation and the time taken by the FCA to complete the process, that period is now being extended.
With the addition of Asta to Davies we are now in a position to support MGAs throughout their journey. From their creation to their move to a regulated entity, then to an underwriter, backed potentially though a captive facility, through to entering Lloyd’s via the Syndicate in a Box scheme, to the establishment of their own Lloyd’s syndicate. We can be with the business every step of the journey.
I am sure that the conversations we have in Manchester will be varied and with capacity conditions easing in the past three months it is likely to be a positive three days in which the entire insurance ecosystem will be in one place providing the opportunity to engage with the market, support our clients and highlight the benefits we can deliver thought the whole MGA journey.
If you would like to continue the conversation, get in touch with Executive Chairman, Chris Butcher at firstname.lastname@example.org
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