Expansion and Rigor: A Balancing Act for MGAs
In the dynamic world of insurance, where risks can shift rapidly, Managing General Agents (MGAs) constantly face the challenge of balancing growth with sound underwriting practices. While expanding their offerings, such as by quickly launching new products, is crucial for long-term success, maintaining strong underwriting and risk assessment is essential for profitability.
For Amy Carlisle, President of MGA Solutions at MSI, growth and underwriting discipline are not opposing forces but rather are intertwined. “We only have the privilege to grow if we produce the results that we have promised to our partners,” Carlisle stated. “Growth and underwriting discipline are very interconnected at an MGA, even more so relative to being at a carrier.”
Balancing Growth and Sustainability
Unlike traditional insurance carriers, Carlisle explained, MSI doesn’t have the advantage of investment income or the ability to subsidize one product line with another. Consequently, each program must prove its worth. However, MSI’s flexible technological infrastructure enables it to quickly adapt to changing conditions.
“It’s not just, be fast and be profitable or disciplined and not grow at all,” she said. “Both go hand in hand, and the flexibility of being a 10-year-old MGA allows us to react very quickly and manage both profitability and growth at the same time.”
MSI is currently celebrating its 10th anniversary. Founded in 2015 by Jim Roche and Brian Schultz, the company has expanded from a single-product MGA to a multi-faceted organization, now offering over 20 solutions across personal, commercial, and specialty lines. In 2019, MSI joined The Baldwin Group.
To prepare for its milestone year, MSI rebranded last year and surpassed the $1 billion mark in in-force written premium, a significant achievement that Carlisle is proud to note. Reflecting on the company’s journey, she highlighted three fundamental drivers of MSI’s success: underwriting results, speed to market, and a forward-thinking approach.
Talent has also played a key role. “We have attracted individuals to MSI who have deep expertise in their product lines and markets,” Carlisle said. “By and large, I would say our talent has gotten us here.”
Building and Flying the Plane
MSI’s journey has not been without its challenges. Internally, the MGA has been “building the plane while flying it,” as Carlisle describes it, which has involved rapidly expanding into new lines while concurrently developing the infrastructure to support them.
“As we’ve gone from being focused on exclusively being a renter’s business into increasingly complex lines where we had to develop new technology capabilities, new expertise around different jurisdictions,” Carlisle explained. “We operate in both admitted and surplus line spaces, so needing to have all the capability support to support doing both.”
At times, MSI has set ambitious goals and then needed to quickly assemble the right teams, build the necessary technology, and refine its internal processes. However, Carlisle does not view these challenges as setbacks. “There have been moments when we’ve gone into new product lines where we’ve had to pull folks together and collaborate as an organization to get things done,” she told Insurance Business.
Externally, the company has had to navigate challenging property reinsurance markets, economic volatility in casualty lines, and evolving regulatory landscapes. These pressures have required MSI to remain agile, adapting its strategies in real-time.
The Future of MGAs and MSI
Looking ahead, Carlisle does not foresee substantial structural changes in the MGA landscape in the near term, although she anticipates increased consolidation. Larger MGAs, including MSI, will continue to expand and refine their operational models in order to function more like traditional carriers.
“There’s a lot of single-product line type MGAs that I think will ultimately be looking for a long-term home,” she said. “So, be looking to either merge or go through acquisition into a larger MGA.”
With $1 billion in in-force premium under its belt already, MSI is looking toward the next growth phase. Besides maintaining underwriting discipline, Carlisle’s focus on talent remains central to this vision.
“As I look ahead to the next 10 years, I want to make MSI a great place for talent to grow,” she said. “We want all the people that we brought in from the outside, with all that expertise, to see MSI as a place to grow themselves.”
For new MGAs seeking to establish a presence in the market, Carlisle offered a framework for success: distribution, underwriting, and technology. She noted that many MGAs excel in one or two of these areas but struggle to integrate all three effectively.
“They’ll have amazing technology that is super slick, but they might not have a product that people want,” she stated. “Or they might have access to distribution, but they don’t have the people that have the underwriting sophistication and actuarial capabilities needed to support the business.” She believes that without all three components, long-term viability is unlikely.
