Insurtech MGAs: marketing is the missing ingredient
It’s still brand marketing that drives MGA success, despite technology enjoying its highest profile ever
Technology is driving conversation and opportunities for business growth in the insurance world. But what is the recipe for insurtech success for a typical MGA? We know it usually requires a mix of underwriting expertise and the latest technology, whether that’s the cloud, AI, big data or predictive analytics.
The third ingredient relates to selling and distribution. It is the ability to differentiate the product, to make the ultimate sale, in what is an increasingly crowded and competitive insurance market. That’s a vital requirement and the missing part of the equation.
Technology is usually credited as revolutionary for distribution, but so long as we’re still selling to our fellow human beings, marketing remains at the core of success.
The problem for some insurtech-focused MGAs is that although the management team may score highly in the core skill sets of underwriting expertise and technology (or have the right partnerships in place, for the latter) they may lack the sales and marketing skills vital to succeed.
Previously, these skills were the natural domain of broker face-to-face relationship management, but in a globalised era when technology and e-commerce is transforming, replacing or supplementing sales and broking distribution channels, it is crucial to that marketing moves up the value chain.
This doesn’t mean that old-fashioned broking is no longer needed, as essentially, marketing is what we’ve been doing in the London market for a long time. Face to face relationship building is how we have built trust in the insurance industry and the transaction of insurance will always rely on trust, because at its heart, it is nothing more than promise to pay.
Many in our sector, see the development of inbound marketing and digital distribution as reducing the role of trust and relationships in the market. In fact, I believe the opposite is true and that digital will build more effective relationships, introducing us to wider pool of contacts than we previously had.
The core skills of business development, marketing and sales will still be the main function of brokers but how we identify, engage with and market to our client base will evolve with greater emphasis on lead generation and engagement coming from inbound marketing led by social media.
It is clear to me that start-up MGAs understand the importance of differentiating themselves in a crowded marketplace better than many incumbent businesses. This means they are likely to lead the way in developing and effectively utilising new marketing technology to sell their products and services in the insurance sector. Where they lead the rest of the market is likely to follow, and those that fail to take up the opportunity that this new tech offers, whether entrepreneurial MGA or establishment insurance player, risk being left behind.