August 27, 2019

MGA integration

The MGA/Wholesaler/E&S Broker discussion continues.

To hear the previous calls recording, please click to view
To read a summary of what was discussed,
please continue to review this information.

A digital connection between all partners, in an efficient, cost effective manner is the reason for the AUGIE Group MGA Integration initiative.

The scope of the project includes all partners throughout the pipeline and lifecycle of the insurance relationship. This includes submission, sharing of documentation, rating and the exchange of data - policy, claims and direct bill commission statement.

Throughout the years, the retail independent agents and brokers have realized operating efficiencies and time savings because of automated data exchange and document delivery with their retail carrier partners. The technology is available to extend it to the niche, program providers as well as their intermediary, MGA/Wholesaler/ Excess and Surplus (E&S) Broker level.

The industry is seeing positive movement with automating program and niche business in the E&S market. To continue the momentum, AUGIE Group will advocate, educate and facilitate discussions that will assist on overcoming the challenges that the group has identified. To learn more about the opportunities for the industry to overcome the challenges, please continue to read.  
The most critical opportunity is "timing”. All the partners in the pipeline need to be able to connect with each other. The connection is based on each of the partner’s technology and what they have implemented to exchange data and documents. 

A few industry partners have been benefiting from connecting with their MGA partners since 2008. Today there are more systems assisting with the connection and more partners able to connect. Do you know if your partners in the pipeline are ready to connect?
Digital identification of the partners in the pipeline
Another opportunity is identifying the MGA/Wholesaler/E&S Broker and the Niche/Program/E&S Carrier, when digitally exchanging information. Prior to a recent update, Niche/Program/E&S Carriers, used the NAIC # with an appended letter to create a unique partnership. (The NAIC number is a number that the National Association of Insurance Commissioner's assigns to each individual underwriting company.)

Industry partners recognized this, and formed a working group to address creating a unique identifier. The unique identifier that was adopted is the National Producer Number, NPN. This is a new data field, and the agency management systems need to be able to recognize and use it.

Why is it important that the agency management systems implement the NPN? Some MGA’s/Wholesalers/E&S Brokers represent hundreds of program/niche/E&S carriers. Previously the industry had a work around. They suggested that an “alfpha” be added to each NAIC to identify the MGA/Wholesaler/E&S Broker who had placed the business. The challenges in using this are the following:
  • Some MGAs represent hundreds of carriers
  • Agencies need to set up their system with each modified NAIC code
  • This creates a manual data entry & support nightmare
  • and, Many MGAs have names that start with the same suffix
The NPN resolves this challenge; it identifies each individual MGA/Wholesaler/E&S Broker.

There are currently five agency management systems who have implemented the NPN. They are Applied Epic, EZLynx, Hawksoft, NASA Eclipse and Xanatek.
Retail agents need to be on current agency management systems
The retail agent and brokers need to stay on current systems, specifically to take advantage of connecting with their MGA/Wholesaler/E&S Broker partners. Retail agents and brokers want to use their system that has implemented the NPN, or advocate that their agency management system provider implement the NPN.  

The agent and broker will also realize the most benefit when they utilize commercial and personal lines download, which includes policy and claims data, as well as documents.
Nothing happens unless a sale is made! Ensuring that the retail agency is able to efficiently submit information to their MGA’s/Wholesalers/E&S Brokers is a challenge for the industry to overcome. The use of eDocs and Messages connectivity is one solution being discussed and utilized by some of the partners. Commercial rating tools are also being broadened to the entire pipeline, although the number of carriers implementing this is limited.

AUGIE group will continue to discuss the challenges and opportunities needed for the industry to implement submission.
Pricing of Connectivity versus other distribution costs
MGA/Wholesaler/E&S Broker partners strive to reduce their costs. One way for them to do so is to turn off the paper. When this is done, the MGA/Wholesaler/E&S Broker partners should do this in conjunction with the implementation of eDocs and Messages. Many agency's are receiving eDocs and messages download today, from their retail carrier partners.

The benefit to the partners is that
  • the MGA/Wholesaler/E&S Broker partners save on their printing, handling and shipping costs.
  • The retail agent has information delivered to their system, and ultimately less manual handling expenses.

MGA/Wholesaler/E&S Broker's who want to learn the cost of connecting should contact
Industry awareness of AUGIE Group’s MGA Integration initiative
AUGIE Group is now taking the lead on bringing all interested parties together to identify, discuss, educate and advocate for this segment of the industry.

 If you haven’t done so to date, please contact AUGIE Group and request to be included in the MGA Integration industry effort
Registration for the
October Face-to-Face meeting is now live!
Agenda for the October 13 - Face to Face in Las Vegas, NV - 2:00 PM to 5:00 PM

Join us for three hours packed with information and discussion. We're finalizing the agenda and speakers for our October meeting in Las Vegas now. Here are the sessions so far:

  • Agency Management Systems Leader Panel--Steve Anderson will facilitate
  • The Digital Ecosystem--Participate in this important discussion led by Kitty Ambers (AVYST) and Jason Walker (Smart Harbor). 
  • The MGA Connection--there's a tremendous amount of opportunity for integration between MGAs, carriers and agencies

We're adding more topics to the agenda, as our community-led working groups make progress. We'll also be awarding the Andy Fogarty Industry Achievement Award. Be sure to register now to secure your space.
The Andy Fogarty Industry Impact Award

Do you want to nominate an unsung heroe who work very hard, some in the spotlight, and many others in the background, to further the cause of independent agents. These are the people who are working in carriers, agencies, vendors, user groups and as industry thought leaders to help advance processes and technologies to make things more efficient, more effective and better for agents.