National Programs’ value proposition: Actuarial support and carrier relationships
“As an MGA, we straddle a fine line: We must make money for our carrier partner, yet we also must make money for our company. We juggle internal profitability of the business and carrier profitability,” explained Kevin Beer, president of Wright Specialty Insurance, one of National Programs’ 29 brands.
“But when our appetite and that of our earlier carrier didn’t jive, we began looking elsewhere,” he added. “It didn’t take us long to decide that Munich Re Specialty Insurance (MRSI) was the right partner – and after their due diligence, they agreed.”
Wright Specialty provides property and casualty insurance programs and risk management solutions to public and private universities, colleges, K-12 schools and government entities. Their services include underwriting, claims, risk management and litigation management.
Beer outlined two specific ways that being part of National Programs helped them gain a successful relationship with MRSI.
1. Building on existing carrier relationships
“You never know when you’re going to need to move a program to a new carrier, so it’s imperative to always be building relationships with various carriers,” Beer explained. “It’s definitely a long game.”
The existing MRSI relationship enjoyed by several National Programs companies, and parent company Brown & Brown was a major influencer in the decision. “Rather than being a lone ranger with our earlier carrier, we now have the presence of Brown & Brown behind us. Our relationship with MRSI is a bigger, better one,” Beer explained. “There were more opportunities working with MRSI; plus, their and our appetites are much more in line.” It also helped that there are many longstanding and deep relationships across the two organizations that provided clarity around needs and expectations on both sides.
2. Capitalizing on National Programs’ actuarial support
Several years previously, Beer and Wright Specialty had called on National Programs’ Actuarial team to help expand their profitability. The team helped them develop advanced pricing models and loss ratio analyses. For instance, they were underwriting business in the state of Missouri, but when legal challenges made the accounts much less profitable, they withdrew from that market.
The Actuarial team under the leadership of Laura Huang, together with Wright’s underwriting team, also created an account grader. “We were able to collect data for an account, and the model issued a grade for that account, allowing us target profitable business,” Beer explained. It also helped simplify renewal business.
National Programs’ actuarial support doesn’t just provide profitability studies and monitor rate changes or loss development. Instead, they work to understand carriers’ profitability targets and help meet or beat them. Alongside National Programs’ 29 brands, they help build product to generate revenue, expand margin or enhance existing product to do the same.
“When the opportunity opened up to begin talks with MRSI in 2020, we jumped,” Beer recalled. Huang and her team helped put together presentations and showed how profitability had improved over time. Specifically with the Missouri accounts that had been let go, they were able to show that the move ultimately led to more profitability. Huang had several conversations with MRSI actuaries, peer-to-peer, answering their questions.
“Ultimately, we were able to streamline the carrier due diligence process, thanks to National Programs’ and Brown & Brown’s relationship with MRSI and the actuarial and analytical support provided. Both sides knew it was going to work: They knew me, Wright, National Programs and Brown & Brown. It was a great cultural fit. I was impressed that a carrier of this size was able to get to the finish line quickly, in spite of COVID.” He added,
“Here’s what National Programs brings to the table for PAs and MGAs: Strong carrier relationships that already exist, that the average MGA wouldn’t be able to create. And shared ancillary services such as actuarial & analytics support that, on our own, we wouldn’t have been able to afford. But as a team of programs, we have these services and more at our fingertips.”
Munich Re Specialty Insurance (MRSI) is a description for the insurance business operations of affiliated companies in the Munich Re Group that share a common directive to offer and deliver specialty property and casualty insurance products and services in North America. Products and services are underwritten and provided by affiliates of Munich Reinsurance America, Inc., which itself may provide reinsurance products and services. Not all products and services are available in all states; terms and conditions of coverage may vary by state. It is intended as general information only and does not constitute an offer to sell or a solicitation of (re)insurance. Each company is financially responsible only for its own products and services. For more information on MRSI, including licensing, regulatory-required and other information on the operating companies, please click here.