Seven Key Steps Needed For A Perfect MGA Launch

Chris Butcher, CEO of City of London headquartered MGA launch and host specialist AUS (Ambant Underwriting Services), claims new MGA success depends on a structured seven step approach.“There’s a need for practical guidelines for professionals considering the MGA route,” Butcher says. “They should know, from their first thoughts on the matter, exactly what they need to cover for as perfect a launch as possible.”

Butcher and his team recommend a step by step approach for MGA launch success. Step one: Distribution is the key component. Having the best product in the market is not enough. You need to understand how end clients want your product then research the best way to get it to them – be it through a broker or other channels including the internet and mobile technologies. Step two: Make sure you have a strong professional network in place from the earliest stages.The transition from a typically large firm to a sometimes two or three person band is a testing experience. You need the right network and connections in place. They’ll act as your sounding board and give you access to the carriers, investors and business support services you need to take you forward.

Step three: have a clear and appropriate business plan informed by thorough market research. It should demonstrate, with evidence, how you are better than and different to those who also write your target class of business. And it should show, in detail, how your pricing will work. Step four: Once you think you have your business plan in place triple check and test its robustness. Test and test again! In addition to the obligatory second opinion you should seek out a third industry opinion. And step five: Get firm carrier as well as external investor commitment at the earliest stages possible of your development. Step six: secure expert external support in the key areas of finance, marketing, regulatory/compliance, back office and IT – ideally from one source. There must be no distraction from your core business. And step seven: build a war chest to see you through the initial trading period of your new MGA. This needs to be in place as income will be slower, lower and come later than you think.

Butcher concludes: “A careful study of MGAs taking the market by storm shows they follow distinctly similar steps. While the steps outlined are demanding, the rewards for those who follow them can be considerable – so they are worth taking. Actively avoiding points of failure and seeing even more successful MGAs is good news for all stakeholders in our market place.” To date, AUS has brought 20 firms to market, supporting them as they grow and it has further MGAs to launch in its pipeline. For further information see:www.ambant.com/services/underwriting-services