Colis: Record TM attendance highlights robust health of delegated authority space
Another record Annual Summit attendance is a reflection of the “incredible growth” of the specialty insurance space and specifically the delegated authority distribution model, with the segment in robust health and no sign of that changing, according to Target Markets president John Colis.
Colis – whose two-year stint in the role is up at the end of the year – said the 30 percent increase from last year to around 1,500 attendees is also a reflection of the “quality product” the association provides.
Commenting on the longevity of the current buoyant environment in the US MGA and programs space, the executive, who is also CEO of Euclid Insurance Services, said in his mind the growth is not just cyclical.
“Having done this for a number of years, I do see cycles. But in this case, I think this is a permanent trend line, I do not think this is cyclical at all. Growth is a function of the increasing complexity of our economy – that is not going to change.
“So I don’t see specialty growth changing at all the popularity of the MGA model and the benefits it brings, the flexibility, the focus, the effective use of IP, the quick response time – that’s not going to change. Those fundamental attributes pushing the growth in our space will do nothing but continue,” he said.
Asked about the perils of growing too fast, Colis acknowledged that events such as the Vesttoo scandal can lead to “stumbles”.
“Once you put your guard down, and stop dotting the i’s and crossing the t’s, trouble happens, but then there’s a quick self-correction. So with a growth rate like what our sector is experiencing, there may be a few toes stubbed, but I think the reaction time will be quick. We pick it up and continue on the general growth upward,” he suggested.
Responding to industry changes
Looking back over his two years as president of Target Markets, Colis highlighted areas of focus as the association sought to provide its membership with the tools and resources to address changes in the industry.
Among those changes was the influx of hybrid fronting carriers into the segment.
“That’s a definite trend and we’ve responded to that in a couple of ways. One, we made it easier for reinsurance intermediaries to enter Target Markets and attend our meetings. Those hybrid fronting companies need reinsurance and so as a reaction to that, having more reinsurance brokers being part of Target Markets was definitely the appropriate move to make,” he suggested.
The association provided educational resources with workshops and presentations to focus on the trend.
Colis also pointed to the challenges around finding talent that have been pervasive in the sector – especially the need to attract young talent in a fast-growing market.
He noted that this year’s Annual Summit agenda includes a presentation to mark the beginning of an effort to connect colleges with risk management curriculums with Target Markets members and for the association to then help educate those students about opportunities in the program space.
And he said that under incoming president Tom Gillingham’s watch, the association will be making a “very interesting” investment in its Target university education effort.
Migration of talent
Away from the urgent need to attract talent to the more junior ranks of the US programs space, Colis was asked to explain the drivers behind the influx of senior underwriting talent from carriers to MGAs and other delegated authority vehicles.
“The traditional insurance market is sort of a union of financial capital and intellectual capital. The MGA model allows for the bifurcation of those two components that allows underwriters who represent the intellectual capital to operate separately in their own world unleashed from the constraints of the traditional company model,” he observed.
Colis suggested that when done correctly, the model allows for greater focus, quicker decision-making, smarter risk assumption and more creativity.
Innovation can be further fostered in this environment where there is also typically less bureaucracy, allowing for speed to market – as well as freedom from legacy systems, which he said have been a drag on traditional carrier operations.
“At its core, the MGA model allows an excellent underwriter to, let’s say, self-actualize professionally, financially, even emotionally in a way different from the traditional model. I think that picture is super attractive to great underwriters, and it really promotes the migration of talent to the MGA space,” he concluded.