I'm trying to get other people's inputs regarding the cons of contracting MGAs to perform work for Kingsway, or any other insurance carrier for that matter. Here are a few pros cited from an article by Joseph Hutelmyer AAMGA; 1)Most MGAs are specialists in lines or classes of business and know the exposures and coverages better than a casualty or property generalist underwriter. 2)Automation has long been the key to success for the successful MGA. Innovations in processing, data management, and statistical analysis are commonplace among the distribution system. MGAs have developed information systems that would be extremely costly to duplicate at the large company level. 3)The MGA will want to do what is best to protect the program and if they do not have a claims staff, they know the third-party administrator’s claim experts and administrators who do.
Based on the recent press release by Kingsway regarding the Q4 earnings, you have your answer. Now you know the costs of the fox watching the hen house.
If the Pennsylvania Department of Insurance has anything to say about matters, Lincoln General could be placed into rehabilitation - perhaps even conservation and liquidation of they continue to hemorrhage cash and their results continue to deteriorate.
Management in both Toronto and York, PA have been reckless in the way the Lincoln General has been run. You haven't seen the end of the blood letting.
1. A "generalist" underwriter has NO business writing specialty business via a MGA.
2.MGA systems are not inherently "better". MGA systems tend to be built for the the purposes of the MGA not the U/W. These are not necessarily compatible or complementary.
3. These are business relationships where each party tends to look out for their own best interests. To let a MGA, or their TPA, handle the claims on program business sets up an inherent conflict of interest, unless there are significant safeguards built in.