“The most important claim challenge facing MGAs and MGUs today is not any different, really, than that facing specialty liability carriers – and that’s the ever-increasing severity that exists,” Blasio said. “, when you think about social inflation, nuclear verdicts, the reptile theory, the outcomes that we’re seeing as cases are getting tried, especially on this post-COVID world – severity is the number-one issue. And within the specialty space, as a way to combat severity, you would like folks who live and breathe the industry that you simply are underwriting. I mean, having generalists handle specialty liability claims is a recipe for disaster.”
Blasio also said that coping with the “Great Resignation” and the continued presence of COVID-19 generally is a challenge for MGAs and MGUs, as there’s “truly significant competition” for talent, together with staff needing break day for medical reasons.
“Having staff and keeping staff is actually, really a problem for everyone on this business,” he said. “But particularly, you recognize, for MGAs and MGUs that tend to not have large claim departments. So the lack of a number of individuals will be very unsettling.”
Lastly, he said, data maintenance effectively is at all times a challenge.
“Whether you’re talking about using the info for evaluating risk that you desire to proceed to underwrite, whether you desire to use the info and integrate it with risk mitigation efforts – which is oftentimes a calling card of MGAs and MGUs – the flexibility to work with their client insureds to develop risk mitigation efforts coming out of their claims data,” he said. “The improved regulatory environment also exacerbates this, because you would like the technology that may take care of that.”