It’s been a year since IE has spoken to Danny Maleary from Pro Global, so BIBA 2024 was the perfect opportunity to catch up with what’s new in the world of MGA services for brokers who want to scale up and distribute more cover lines.
IE; Let’s start with an overview of the year, been busy Danny?
DM; So for us 2023-24 has been another year of growth, 25% in fact which is phenomenal for us, not just in the UK but in Europe as well. In the EU we saw exponential growth in what we’re doing which is great. Interestingly there’s also been more focus on UK regions
within the UK, brokers considering becoming MGAs, looking at new products and what regional customers are looking for as well.
Some real good themes emerging over the last year and in terms of opportunities we are seeing maybe 8-12 opportunities a month. Lots of interest from what I call risk capital insurers too. They’re looking to serve clients in much more effective way, backing those who are more entrepreneurial brokers.
IE; Always good to see new trends emerge in broking isn’t it?
DM; It is, we are seeing more green insurance brands and product lines this year too. Also seeing greener re-insurers looking for their own suite of MGAs. On the broker side the green brokers are looking to differentiate themselves from mainstream brokers. Lots of this feels like it’s being built around embedded insurance.
We are seeing a real appetite for embedded type propositions; whether that is digitisation of affinity brands, where the product is aligned with values. Other areas are busy for us, like automotive, construction, engineering, wearable tech, plus franchises. Four key trends
or themes there specifically tied to embedded cover. As a business it’s taking us to another level, our team is building out and we are bringing in new starters from graduates to school leavers as well. The industry needs that new perspective from new entrants.
IE; I heard elsewhere at BIBA 24 that some brokers are MGAs are forging closer, long term partnerships over say 4 or 5 years. So instead of just trying to panel out a product service both parties are looking for something more about value than the lowest price. Are you seeing some brokers looking for a dedicated MGA, as a service standing behind them?
DM; Yes I do see that. You see brokers listening to their customers and wanting to align their product lines, as something more niche or bespoke rather than just the generic aspect of it. It’s a big driver as is fresh risk capital coming into the UK and they are supporting regional brokers who want to tailor their products more.
IE; You can see that on re-insurance, with all the extra layers of compliance that can apply each year, it becomes more specialised in terms writing cover.
DM; It is very specialised and we’ve seen that since 2022, where a partnership develops in terms of alignment on one specific type of reinsurance cover. Everyone in that chain wants to feel comfortable with the brands involved, see more transparency on reinsurance in general.
IE; On Motor car premiums are doubling in some cases, do you think in the UK the big comparison sites will see specialised MGA support that can help them compete with the mainstream sites?
DM; The UK is a bit different, a bit slow to react compared to the rest of the world in terms of pricing, technology, embedded cover inside a lease agreement for example. Brokers are thinking out of the box a bit more. What do I mean by that? Brokers on motor are contemplating their own MGAs, bit like Tesla in the USA. What Musk has done is embed the insurance offer as part of the Tesla ecosystem, like a bit of glue that holds the system together. Other brands can use captives to support a portfolio approach, a brand led insurance product if you like. Margins are very slim on Motor and the way ahead is for brands in the UK car market is to learn from that and take that approach.
IE; I see people leasing a prestige Jaguar, Merc or BMW and complain online that they are paying almost as much a month in cover, as they are to lease the car. Maybe the way ahead is to add insurance as part of the lease package, at least at basic TFTP or Fully Comp, then you can add legal, breakdown, EU, medical etc. on top?
DM; There are brands in the car market that embrace that concept. It’s how you set that up with a captive insurance brand, and get to a pricing point where the lease finance company are happy, drivers, dealers – everyone.
IE; You walk into an Audi or Land Rover franchise and it’s like an art gallery, it’s pure luxury sales. But then those leaseholders who have bought into this prestige lifestyle are shopping online for the cheapest cover they can get on a 70K asset.
DM; There is like mindedness to do something different in the car lease market for sure. It’s taking time, but more people are realising that insurance can add value, it isn’t just about price.
IE; Lease companies and insurance brands are seeing some FCA regulation coming their way on interest rates for monthly payment plans. That may spur on some action soon?
DM; It is great timing and the regulator is right to focus on that issue. The right MGA and the right mindset can build cover that can be embedded into car lease packages. What I hear is that lots of work is being done on that topic. Groups of MGAs, brokers and insurers are making the right moves in that direction, definitely.
IE; Good to know, Danny thank you for your time.
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