Three ways MGAs can boost speed to market with AI
MGAs are racing to differentiate themselves through new products and services. According to Conning, the US MGA market grew by 13 percent in 2023 to more than $80bn in premiums, and this expansion is expected to continue.
This growth is fuelled by greater competition from established MGAs and new start-ups looking to capitalise on the opportunities. Being the first to bring a new product to market typically means the MGA can stand up new offerings quickly and gain market share.
AI tools, from legacy machine learning solutions to newer generative AI platforms, are enabling MGAs to increase their speed to market. These technologies can impact everything from product launch to retail distribution.
Here are three ways AI solutions can help MGAs bring new products to market faster:
1. Staying ahead of new market trends
AI tools are nothing new to MGAs. Many have been using forms of AI, including machine learning and robotic process automation, as part of their processes for many years. Insurance is heavily reliant on documents. For example, MGAs have used AI tools to populate their systems with statements of value, loss runs and submission applications, eliminating the need for humans to enter data manually.
With the advancement of GenAI, MGAs can marry data with content creation for more advanced insights into emerging market trends. For example, AI solutions can scrape information from the documents collected by the MGA and upload that information into models. The models can provide predictions on risk appetites, pricing and decisions about whether terms and conditions are offered.
GenAI can also pull information from other third-party data sources to inform the models. For example, following the Baltimore bridge collapse, an MGA could use GenAI to analyse the market and determine if a new product is needed to protect ships as they travel through high-risk areas.
By using AI solutions in their modelling, MGAs may uncover unexplored markets and create an innovative product before the competition.
2. Expediting product launches
Most MGAs are heavily focused on market share and need to get products out quickly before competitors offer similar coverage. Setting up a new product in an MGA’s policy administration system requires significant time and expense, which is detrimental to the speed-to-market goal.
GenAI is enabling MGAs to accelerate this process significantly. It can be used to create business requirements for the product. The technology can also help with the necessary coding to add the new product to the platform.
Once the product is ready to launch, GenAI solutions enable the MGA to provide coverage to clients faster. AI-powered tools can review submissions from retail agents and determine if they meet underwriting guidelines, or flag applications that are missing information. The underwriter can then make the final review, spending their time focusing on more complex submissions.
3. Spreading the word
When a new insurance product is ready to launch, the MGA alerts its distribution network about the latest offering. In the past, an MGA might take a blanket approach, sending information to all retail agents, whether or not the product is a fit. This could sometimes lead to some retail agents tuning out irrelevant messaging.
Using GenAI, MGAs can conduct targeted marketing to ensure the products reach the agents who are most interested in selling that type of coverage. The MGA can also use GenAI tools to create custom communications for different agents, showcasing why the new product would benefit their client base.
Speed to market is paramount for MGAs. By utilising GenAI, they can stay competitive by accelerating their ability to identify new areas of need, develop products quickly, and launch them before their competition while minimising costs and impact on the target implementation date.
By Michael Parcelli, senior vice president – client partner, MGAs/MGUs/brokers at Xceedance