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Digital underwriting through the lens of MGAs

date: 7 May 2024
reading time: 7 min

In an era where digital transformation is reshaping every corner of the business world, the insurance industry stands at a pivotal crossroads. The underwriting process, a cornerstone of insurance operations, is undergoing a digital evolution, spurred on by technological advancements in recent times.

The transformation, fuelled by advancements in artificial intelligence (AI), machine learning (ML) and data analytics, promises to redefine the traditional paradigms of risk assessment and policy pricing.

The shift towards digital underwriting is not merely a trend but a strategic imperative, aiming to:

  • drive efficiency,
  • enhance decision-making accuracy
  • and elevate the customer experience to new heights.

The latest episode of IT Insights InsurTalk series by Future Processing sheds light on this transformative journey, featuring an in-depth conversation with Michael Keating, CEO of the Managing General Agents’ Association. With a career spanning over four decades in the insurance industry, Keating brings an experienced perspective on the digitalisation of underwriting processes having worked in a variety of Managing Director roles in multiple insurance companies.

In this article, we delve into some of the most important themes discussed in our conversation, such as the growing importance of the MGA market sector, the evolution of underwriting processes and the vital role of human interaction in the age of automation.

Through Michael’s lens, we explore the challenges and opportunities presented by digital transformation in insurance underwriting, providing a comprehensive overview of the current landscape and envisioning the potential that lies ahead.

The importance of the MGA market sector within the London Market

The MGA market sector has emerged as the fastest-growing segment within the UK insurance market, largely driven by innovation, entrepreneurial spirit, the expertise of underwriting in the industry and insurers’ subsequent confidence in allocating capital to specialised underwriters.

Within the London Market, all of these attributes are firmly embedded, with international MGAs at their heart. There are UK domicile MGAs within the London Market, such as Lloyd’s, boasts over 600 cover holders. Not all of these are MGAs, but a large proportion of them are indeed.

The London Market’s blend of international and domestic entities underscores the sector’s integral role in the insurance ecosystem and makes up its very fabric, and due to this ever-evolving underwriting expertise and specialisms, the London Market enjoys a position of diversified and specialised insurance underwriting conglomeration that is simply not mirrored anywhere else on this globe.

The evolution of underwriting processes for MGAs

The journey from traditional, paper-based underwriting to digital processes marks a significant evolution in the MGA sector.

Long gone are the ‘quill and ink pen’ days of underwriting, since replaced with technology as the cornerstone of the insurance industry. This technology:

  • helps to streamline transactions,
  • enhances communication,
  • and ultimately leads to improved customer satisfaction.

An important aspect of this technological transition in MGAs’ underwriting processes is the move towards electronic bordereaus (reports from an insurance company to its reinsurer, listing either the assets covered or the actual claims that are paid).

While electronic bordereaus have not been adopted by the entire insurance sector quite yet, with some aspects of the business still being very much paper-based, they hold a significant presence in the market, which is only likely to increase.

Technology has significantly impacted the insurance underwriting world in two key ways:

  1. it has removed frictional costs (the total direct and indirect costs associated with the execution of a financial transaction)
  2. and increased communication channels between all stakeholders (provided they all have access to the same technology).

Technology ultimately enables solutions that increase customer satisfaction, most importantly when it comes to the speed and overall experience of going through the claims process, both inside and outside of the London Market.

The Crucial Role of ‘Human Touch’ in Claims Processing

While the technological advancements we’ve enjoyed in the insurance industry have undoubtedly brought with them numerous benefits, the human element remains crucial in claims processing.

Michael Keating mentioned that through his own deep dive into consumer intelligence, despite the advancements and wide-spread adoption of technologies such as AI, interactive ‘chat boxes’ and even Chat GPT, 8 out of 10 customers prefer to speak to a human when it comes to getting through triage successfully.

The message customers are delivering is clear – the industry’s push towards automation and AI tools must not overshadow the importance of human interaction.

Despite the undoubted need for the insurance sector to explore and adopt digital solutions, a balanced approach is required, one that incorporates technology without losing the personal touch.

AI’s role in improving the underwriting process

While it is still not yet fully developed in the insurance underwriting world, AI is nonetheless poised to revolutionise the underwriting process.

It offers several advantages, including, the ability to increase operational productivity and to reduce frictional costs. AI can triage broker presentations and strip out information that is not relevant or required to price and assess risks, saving huge amounts of time, increasing productivity and saving costs.

However, adopting AI and bolstering its capabilities requires insurance companies to step back and have a clear business plan on how they intend to use it. Simply adopting AI for adopting AI’s sake is not optimal – it must be based on a clear and well-thought-out strategy. AI must be a tool that is used to achieve strategic goals, not the end goal in and of itself. AI doesn’t, and shouldn’t replace the human element in insurance underwriting, where a human touch will always (hopefully!) be required.

Digital underwriting transformation from the MGA perspective

Digital transformation in underwriting goes beyond technology adoption; it requires a synergy between MGAs and their capacity providers.

All parties in this partnership should be founded on shared data and goals, ensuring seamless communication and a unified approach to risk assessment, pricing, claims management and any other insurance industry sub-section.

When adopting digital processes and technologies, insurance companies must gather all stakeholders ‘around the table’, so to speak, to review, discuss and share their vision and to ensure that they are all on the same page.

A recurring theme in the digitalisation of insurance underwriting is that of achieving a ‘single set of data’.

Insurance companies tend to use different systems, technologies and communication portals, meaning that data is stored in various locations, making it hard to access and analyse. In order to fully embrace a widespread digital solution, collating all data into one common set is the key to fully digitising it effectively and efficiently.

Poor (or a lack of) data can be catastrophic for insurance companies, so in terms of the richness of data, the alignment in how you import that data and how it matches premiums (in terms of analysing it and coming up with efficient solutions) is really important.

Communication is key – communication between companies and their stakeholders, between the London Market and between the wider insurance industry as a whole.

The art of possible: the utopia of digital underwriting?

The ideal state of digital underwriting marries technological efficiency with human insight. While digital tools and solutions will (and already are) undoubtedly change the landscape of insurance forever, it is important not to run before we can walk. A human touch is most certainly required, now more than ever, but this shouldn’t be cause for pessimism when it comes to adopting new digital technologies and solutions.

This ‘utopia’ will likely centre around a central electronic data exchange where risk appetites, risk assessments, pricing, operational efficiency and data analysis take place openly and seamlessly.

Through this, insurance companies could expect to enjoy profitable growth, groundbreaking developments through innovation, and exponentially improved efficiency and cost savings.

Technology, AI and machines should be used as tools to bolster insurance underwriters’ risk and data analysis tasks, and not be the end goal in and of themselves. This vision emphasises the importance of a holistic approach where technology enhances human capabilities, ensuring that the insurance industry not only adapts to the digital age but thrives in it.


As the insurance industry continues to evolve, the balance between technological innovation and the human touch will define its future.

By embracing digitalisation while preserving the essence of personal interaction, the industry can navigate the challenges ahead, offering enhanced services that meet the evolving needs of consumers.

The insights shared by Michael Keating offer a roadmap for this journey, highlighting the potential for growth, efficiency, and customer satisfaction in the era of digital insurance.

If you would like to watch our full interview with MGAA CEO Michael Keating, follow this link to head over to our IT Insights Hub where you can enjoy our gripping conversation in its entirety.

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