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DECEMBER 2014
Colleagues,

Welcome to our December newsletter; again, any comments, suggested topics or ideas on how to improve this would be gratefully received.

~The Editorial Board~

The Humble Beginnings –
Reg Brown, Chairman of MGAA continues his story of our formation.

In the October Newsletter I described the humble beginnings of the MGAA. I concluded the article at the second meeting of the inaugural Steering Committee on 21 July 2009 when I “expressed some scepticism as to the value of forming another new association in an already overcrowded arena, where the market is unsure of whom to take note.”

I was determined after that meeting to cast the net as wide as possible to find out whether there was support for the idea. Lloyd’s was making some very positive noises about it, not surprising since 30% of Lloyd’s entire business comes from Delegated Underwriting. Not surprising also, bearing in mind the strong relationship Lloyd’s has with the AAMGA in the US.

I was intrigued by the fact that there were MGA associations in the US, Australia, Canada and South Africa. So why wasn’t there one in the UK? Perhaps, there simply was no need for one.

But who should I consult to find out? The broking trade bodies BIBA and LIIBA were obvious starting points but would they see us as competitors? Possibly, but they were both very helpful when I spoke to them. Francis de Zulueta was quite keen we should talk to BIPAR, but I felt we should crack the UK first before extending our range to Europe. The ABI, Lloyd’s, LMA and IUA were also obvious people to consult and were equally helpful.

At this stage we had only a vague idea how to define an MGA and could only guess how many there were in the UK. Lloyd’s has a list of Coverholders on its website, but most of them are brokers with Binding Authorities. We decided early on that brokers were not our target, they were already well looked after. The FSA were no help in this regard either, because MGAs were simply intermediaries, deserving of no special consideration.

So the Steering Committee drew up a list of prospective members from the Committee’s own knowledge. We guessed there might be + or – 200 “pure” MGAs in the UK, writing around £5bn of the £40bn of general premium income.

Over the next few months the six individual members of the Committee divided up responsibilities for the drafting of a Constitution, a Prospectus, a budget, a PR plan and a website. At this point we had no members, no money and no home. Everything was being done by the Committee members in their own time and at their own cost. Their enthusiasm and drive impressed me greatly, and whilst there were times when we wondered whether it was all worthwhile, we carried on. Progress was not as fast as we might wish but I was determined to do everything correctly rather than in a rush.

By 11th October 2010 we were ready to go public with our plans. By then our Steering Committee had expanded to eight. David Coupe (then of Clyde & Co) joined as our legal advisor and Keith Stern joined as Lloyd’s representative. Keith’s arrival cemented Lloyd’s support for the initiative and helped to accelerate our progress.

By then we had developed a list of prospective members and had a budget based on a membership of 80. But we needed some “seedcorn” capital of about £65,000 and were not sure where that was coming from. I did not fancy the idea of simply doing the rounds with cap in hand asking for donations. Fortunately, the Press had got wind of our plans and with the assistance of Ian Barrett of Concise PR we were getting some notoriety and a great deal of interest.

I still needed more certainty that the idea had wings and sufficient support among the MGA community, and was unsure whether we should extend membership to others such as the insurers providing capacity to MGAs and providers of services to MGAs.

The only way to find out was to consult those concerned. So with the help of Lloyd’s we called an open meeting for MGAs at Lloyd’s Old Library at 3pm on 23rd November 2010. We asked:

  1. Is your business that of a UK based underwriting agency?
  2. If so, do you agree that there is a need for a new trade association to represent the MGA sector?
  3. If yes, would you be prepared to consider joining such a trade association?
  4. Would you or a company representative like an invitation to attend the meeting at Lloyd’s?
  5. Please indicate the name and email address of the meeting attendee.

Reg will explain the outcome of that meeting and subsequent meetings in our next Newsletter.


Managing Director’s Report
I find it strange to think that as we approach the end of 2014 I realise that I have been at the Association for over 12 months - where has the time gone? Before we look back at our achievements I wish to thank my Board, all Committee and Forum members of the Association for all their hard work and support over the past 12 months.

I find it encouraging to look back at 2014 and evaluate what we have achieved and identify some of our successes and highlights. The most significant is achieving that Holy Grail, 100 members. This was achieved in mid-November and spookily our 100th member was Century Underwriting Limited - we couldn’t have planned that better. It now means that our membership base has grown from 71 in September 2013 to 101 in November 2014. Moreover the accumulative Gross Written Premium of those 101 members is knocking at the door of £3.5 billion, a truly staggering amount. And there are more potential members in the pipeline. What is also encouraging is that 3 members out of the last 6 are operating from Leeds, Essex and Hampshire so our regional footprint is growing.

Our relationship with the regulator goes from strength to strength and apart from the number of private meetings we have held yet another successful “open door” meeting with FCA on the 1st October. With over 90 members registered the FCA entertained us at Canary Wharf where members were encouraged to forward their questions to be tabled at the seminar. The event was chaired by our own LRC Chairman, James Gerry, and the two hour discussion aired important issues which affect our sector of the Insurance community.

In September we ran our third highly successful Capacity Exchange with over 160 attendees. Insurers and suppliers were present which allowed member MGAs to discuss existing relationships and to forge new contacts, and the feedback has been excellent. However with a view to enhancing this event we will be holding a half day conference in 2015 which will include key note addresses from Jonathan Evans MP [Chairman of the All Party Parliamentary Group on General Insurance & Financial Services] and Peter Montanaro, Head of Lloyd’s Delegated Authority. We are also planning a network lunch where members can speak to insurers and suppliers without a time limitation as in the “speed dating” capacity exchange. So watch this space for further announcements.

In July we held our first social function at the House of Commons attended by in excess of 190 members and guests. This function was preceded by a tour of the Palace of Westminster which was enjoyed by approximately 140 of our guests. Jonathan Evans MP hosted the evening and for that we offer him our thanks. During the evening the Association bestowed the following awards:

Reg Brown - Honorary Life Member
Ian Barrett - Honorary Member
David Coupe - Honorary Member
Francis du Zulueta - Honorary Member
Charles Earle - Honorary Member
Sian Fisher - Honorary Member
Brian Russell - Honorary Member
Keith Stern - Honorary Member

Over the past 12 months we have also engaged with:

  • HMRC

  • Law Commissioner

  • Treasury

  • Welsh Government

  • House of Lords

  • AAMGA

  • Underwriting Agencies Council of Australia

  • Benelux MGAA

  • Canadian MGAA

and the list goes on…….

However none of this could have been achieved without your support which shows you have not just joined but are Joining In and helping us shape the future of Delegated Underwriting.

On a sad note, many of you will know that Jane and I are ably assisted by Angela Lacey, but what you may not know is that Angela is retiring on the 3rd December 2014 and I am sure you will all join Jane and me in wishing Angela and her husband, Nigel, a happy retirement.  But on a positive note we are joined by Teresa de Atouguia, and I am sure you will all wish her every success working with the Association.

Finally may Jane and I wish you a Happy Christmas and a prosperous 2015.


Meeting with FCA
On the 1st October 2014 members of the MGAA attend an “open door” meeting with FCA. James Gerry, Chairman of our Legal, Regulatory and Compliance Committee did a sterling job of chairing the meeting and raising members’ previously advised questions. FCA attended with representatives from their Supervision team and also specialists in their Technical and Thematic Review divisions. All questions were addressed, which included a number from the floor. We would like to express our thanks to Alison Walters and her colleagues for this frank and informative discussion.

COVER Excellence Awards
Congratulations to members Pulse Insurance who enjoyed a very successful evening at the COVER Excellence Awards held at the beginning of October. Pulse were thrilled and honoured to win the Small Intermediary of the Year 2014 category.

The winning firm had to continually demonstrate over the year that it is at the forefront of the intermediary protection / health insurance markets. The judges chose their winner based on core competence, offering clients a bespoke service with clear objectives and improving the reputation of the industry overall.


VAT newsletter
Luigi Lungarella at PKF Littlejohn has issued a newsletter with regard to VAT and the Court of Justice of the European Union. Their Monthly VAT Newsletter can be found .  Luigi also issued a VAT Alert further to the recent CJEU’s decision in Skandia America Corporation, which can be viewed here.

Further details and links can be obtained by contacting John Needham


Insurance Bill
On the 13th October Terry Renouf at BLM Legal Services hosted a market briefing with regard to the Insurance Bill which will affect all commercial services. This market briefing was pod cast and can be downloaded from the MGAA website.

However their guide is accessible on their main website here.

Hard copies have been widely available and BLM will undertake a second print run should the need arise. Terry Renouf advises us that they have contacted the CII with a view to arranging an updated version to be circulated with ‘CII Journal’ in Q1 2015


Insurance Fraud Bureau
 
On the 10th November Nick Benham joined the Claims Forum to explain more about the Insurance Fraud Bureau, their work and more importantly their successes. Nick highlighted the work the Bureau has been doing with the Insurance industry and the police forces across the country. Further details can be found here. 


Sanctions Search
During the meeting with FCA sanctions checking was raised.  Whilst FCA acknowledged that firms within a distribution chain may have been doing the same or similar checks, this did not absolve MGAs of their responsibility. We wish to remind members of our facility specifically negotiated for MGAA members which is detailed on our website.


Flood Re
In our October newsletter we mentioned our meeting with Brendan McCafferty CEO of Flood Re.  This new flood market facility is programmed to commence operating in November 2015.  We are pleased to confirm that Brendan and his colleagues have agreed to host a MGAA market briefing in July 2015 to explain how this will operate and to take members’ questions.  Further details will be issued closer to July.

The Flood Re Weekly Status Update (17 November to 31 November) can be viewed here.

In the interim, members are reminded that if they are having difficulty in obtaining flood cover for SME commercial coverage, they should email Peter Staddon with their concerns.


Underwriting Agencies Council
Heath Amber, Chairman of the UAC, visited the offices of the MGAA on the 28th October 2014. Members of the MGAA Board were here to welcome Heath and to discuss common issues which affect MGAs in both the UK and Australia.

Heath would welcome contact with any MGAs who have Australian connections.

It was agreed that Heath and his co-Directors would be visiting the UK in 2015 and he will meet members of the MGAA Board again for further discussions.


MGAA – On the Road
Peter Staddon, Managing Director, and Jane Comerford, General Manager, have been speaking at a number of venues around the country. The last two months included talks for the CII at the following venues:

Manchester       29th October
Cambridge        11th November
Chelmsford       14th November
London              3rd December

Dates for 2015 have been agreed for talks in conjunction with local CII at Exeter, Cheltenham, Maidstone and Liverpool. For further details or to join Peter and Jane please contact Peter Staddon.


Compliance Newsletter
For those of you who missed our October compliance newsletter, it can be viewed here.

Compliance Calendar
Our compliance consultant, CMS, has updated our compliance calendar which can be accessed here.

Financial Ombudsman News
The Ombudsman newsletter 121 was issued on the 21st October 2014 and can be viewed here.

Council of European Council
The council have issued their proposition with regard to the IMD. Details can be obtained here.

Information Commissioner Newsletter 2014
The Information Commissioner has issued its October newsletter which can be accessed here. The newsletter looks at their new CCTV code.

Members' Forum
BLM
BLM hosted an evening with Eliza Manningham-Buller who headed Britain's MI5 from 2002 to 2007

Insly
Insly is a company with 15+ years of history in insurance broking. Started as the first pioneer in online insurance broking in the early 90’s, they have become the biggest broker company in the Baltic States. Among their customers are major Scandinavian banks insuring their leasing asset portfolios.

In order to support the growth and ensure high quality of customer service Insly needed to develop efficient data management systems. A couple of years ago they separated IT development from broker business and started to offer the system to other broker companies and agencies in the Baltics and surrounding areas. For today, Insly software is used by more than 60 broker companies in 7 different countries, including AON and some Lloyd’s brokers.

The main value in Insly software lies in a centralised cloud based data storage and comprehensive reporting and analysis possibilities. You don’t have to worry about employees leaving with data in their heads or laptops, you can have real time management and sales reporting, enabling quick and efficient decision making. Flexibility of the system allows you to design your own products or use standardised solutions. You don’t need any upfront investments and IT staff to use the system. Being a supporting member of MGAA Insly has also included features specific to MGA business and is ready to customize the system further if such needs occur. Please check out the Insly website and try the demo version of the system, or contact them directly and set up a demonstration meeting to discuss further cooperation.

Insly are a new supplier associate of the MGAA and are in the process of preparing to host a market briefing in relation to our software and back office functions.

To enable them to undertake this important work we would ask you to complete their short survey here - INSLY.COM Survey Link


Kiln and Tokio Marine Europe rebrand
Kiln and Tokio Marine Europe sealed their union by formally rebranding as Tokio Marine Kiln – a leading international provider of specialist and corporate insurance.

The newly combined business, formed in January 2014 is now headquartered at the “Walkie Talkie” building, 20 Fenchurch Street, London, EC3M 3BY.

Speaking of the move, Group CEO of Tokio Marine Kiln, Charles Franks, said: “Today is a milestone in the development of Kiln and Tokio Marine as we join under a single brand to deliver continued profitable growth.

Tokio Millennium Re (UK) Ltd, a Tokio Marine Group subsidiary company which has an operation in London, is not affected by this change and will continue to follow its own strategy, reporting to a different management team in Zurich.  

Any questions or to find out more please visit Tokio Marine Kiln.


IDEX Consulting
In a recent article asking if we are losing young talent from the city IDEX Consulting seeks to answer this thorny question and to offer some sound advice.

Risk today
The IUA provide the MGAA with office space and services. Dave Matcham, IUA CEO, regularly issues a newsletter regarding European issues which affect the UK Insurance Market, and by definition MGAs.  In Dave’s newsletter he is looking at Insurance supervisors who are at the forefront of insurance regulatory regime emanating from Europe. To read more about this click here.


MBC
As members are aware our Membership & Benefits Committee reviews membership applications and looks for ways of providing support to members in an array of different ways.  One of the founding members of the MBC is Mike Smith of IIGL.  Mike has been a stalwart of this committee and we were sad when Mike tendered his resignation due to increasing work pressures.  The Board of the MGAA would like to express their gratitude to Mike for his hard work and his total support and to wish him every success in his business.  If any member would like to be considered to replace Mike please send your CV to Peter Staddon.


New Members
We extend a warm welcome to the following new members: -

MGAs
Advantage Underwriting
Century Underwriting
Direct Commercial
Greenwich Underwriting
Portus Underwriting
ReSolution Underwriting Partnership
Signature Underwriting

Suppliers
Applied Claims Consultancy Ltd
Insly Ltd

 


Ascent Underwriting Enters Professional Indemnity and D&O Markets

Ascent who specialise in emerging and professional risks has entered the UK PI and D&O markets following the recruitment of Lindsay Noble and Jonathan Morgan, formerly of Lime Underwriting.  These products will enhance Ascent’s current range of cyber, emerging and professional risk policies.

 

The new team will focus on developing Ascent’s UK financial lines portfolio within the regional and London markets which includes offering renewal terms to Lime’s previous clients.  Other products are being development and a new range of commercial combined products will be unveiled shortly.  For more details please visit the Ascent website.


SSP
Whilst the MGAA accepts the basis that it is the insurers’ intention to make transacting business as easy as possible, we have to accept that this will be with a more intrusive regime from the regulator.  This will then dictate an increased data capture requirement.

But from an MGA standpoint, all too often, different insurers will require different data.  Moreover, many insurers find it hard to accept data captured which is in excess of their specific field requirements.  I think it is time that the industry got behind the single idea of what is actually required to form a standard format of questions.  Therefore Associate members, SSP, has written a white paper which tackles the myth of integrated commercial lines e-trading”. For further details click here.


Training needs
The Association’s Events & Training Committee are in the process of building a bespoke MGA skills programme. To ensure that we can keep the costs to a minimum it would assist us if you would provide details of your 2015 requirements. These could be in relation to any insurance technical matters as well as soft skills. We are planning to run these courses nationally should there be sufficient demand.

To ensure that we maintain the highest standard of training we are using the services of an industry specialist associated with the CII. Please send your comments and requirements to Peter Staddon.