Posted on 16 Jun 10
Headquartered in Sydney, Australia, QBE Insurance Group is one of the top 25 global insurers and reinsurers and has operations in 47 countries. Over the past five years, its underwriting results and return on equity has consistently been in the top five of the world’s 50 largest insurers and reinsurers. A lead underwriter within its chosen markets, QBE bases its success on a culture of coordinated teamwork and a commitment to excellence and top performance. Since 2000, QBE Insurance Group has achieved considerable growth, reporting $14.45 billion in 2009.
QBE’s business in the Americas is comprised of specialty insurance programs, regional insurance and reinsurance businesses. QBE Specialty focuses on a diversified portfolio of products, mainly written through approximately 87 managing general agent (MGA) partners who have a proven track record of profitability.
QBE Specialty Insurance, located in New York, reported a GWP of $1.86 billion for 2009, and is planning to write more than $2 billion in program business premium for 2010. Its focus is:
• to continue to cement itself as an industry leader committed to the MGA market;
• to foster partnerships as part of its core operating principles;
• to develop innovative and value-added products and services for profitable niche markets; and
• to meet the needs of underserved small- to mid-sized Commercial customers.
QBE Specialty can average about five new MGA partnerships per year, depending on the market. I sat down with Fabian Burstyn of QBE Specialty Insurance at the Peak Performance Insurance Ski Conference earlier this year to discuss the company’s commitment to program business, the main qualities of a successful MGA and what it looks for in forging partnerships. QBE was a principal sponsor at the conference and Fabian was one of our key speakers. As Senior Vice President of Marketing at QBE Specialty Insurance, he manages the Auto business program. Prior to managing Auto business, he headed the Workers’ Compensation group from 2003 to 2007.
At the conference, Fabian decided to speak about the key to MGA success in 2010, as a result of questions about what QBE looks for in an MGA partner, and how to establish that relationship. “When we look at partnering with an MGA, we are examining certain common threads we have found to be integral in those that are successful,” he says. “Most importantly, you need to trust the principal with whom you are doing business. When we underwrite an MGA, we look at the leadership of the general agency. There must be strong leadership that is able to articulate the vision for the company and understands the market.” He says QBE determines whether this potential partner can provide us with the underwriting integrity to allow a long-standing relationship. “A large percentage of QBE’s partnerships are 10 years or more. We invest a lot of time and effort in the due diligence process and therefore expect these relationships to last a long time.”
Other issues that Fabian says are key to an MGA’s success include a long-term strategy, underwriting profitability, product development, focused distribution, technology investment, consumer insight, claims expertise and a strong support staff. Fabian says he pays close attention to the underwriter’s market focus. “What is your niche and what do you do that is special within that niche?” he says. He emphasizes that the best MGAs have systems that can look at data and track trends. “If an MGA doesn’t invest in technology, then it doesn’t have the means of providing us with the needed data. That makes doing business difficult.”
The MGA needs to address several issues when approaching a carrier about a specific product:
• What makes the product different?
• Is the product an outgrowth of a trend (such as green initiatives, ethnic growth population, reforms)?
• What is the distribution plan for the product?
• Is there local expertise and presence?
• Are producers profitable?
“A successful MGA is always thinking about what is happening and where and how it can get in, do well and grow,” says Fabian. “Conveying this to a potential carrier partner is critical.”
Understanding customers’ changing purchasing habits--specifically in Personal Lines and simple Commercial Lines--is also critical to a successful MGA. “The Internet, social networking platforms, apps such as iPhone all impact the way business is done today and an understanding of this is essential,” says Fabian.
Fabian also emphasizes that MGAs that “are in the files” are the most successful. MGAs must recognize red flags dealing with claims, including being able to ferret out fraud and abuse. “MGAs that treat claims as core to their business model with the appropriate knowledge will likely bring greater profitability to their programs,” he says.
QBE’s commitment to program business is steadfast. “We are the largest writer of program business, it’s core to our business model and we will continue to support that model,” says Fabian. “We have the ability to write multi lines and we are looking for good niche partners to expand our portfolio. We’re not set on any specific line. We’re looking for people who are experts in their field, who keep in touch with industry trends and know where they are going.”
If you would like to speak to Fabian about partnerships with QBE, please contact him at 212-805-9770 or via email at: Fabian.Burstyn@us.qbe.com.