The Intermediary – February 2025 - Flipbook - Page 75
P RO T E C T I O N
Opinion
Evolution of home
insurance panels
T
here have been several
noteworthy changes in
the general insurance
(GI) market over the
past year when it comes
to home insurance
panels. In particular, we’ve seen
the rise of managing general agents
(MGAs) to greater prominence on
panels, and the shi towards insurer
hosted pricing (IHP).
While this behind-the-scenes
activity may initially seem one step
removed from advisers, it maers
because these changes are providing
greater resilience, agility and
sustainability to the market.
For Paymentshield, they can also
help support broader quotability –
that is, how oen advisers are geing
a quote that is suitable for the specific
needs of their client.
We believe an effective insurance
panel isn’t just about quantity, it’s
about having the right blend of
insurers that provide breadth of cover,
and ultimately means advisers can
provide a more compelling offer to
their clients.
While not insurers, MGAs have
underwriting authority from an
insurer and can do everything from
seing risk ratings and pricing to
issuing policies and managing claims.
However, the ultimate liability for
the cost of each claim still sits with
the insurer.
The reason people are noticing
MGAs more is perhaps down to many
insurers choosing to exit personal
lines markets in the last year. When
you consider the costs associated with
meeting the constantly developing
regulatory requirements – that rightly
place increasing emphasis on positive
customer outcomes – some insurers
have found it challenging to maintain
their profitably. Understandably, they
have had to make strategic choices
about their preferred markets.
For advisers and their clients, there
are clear benefits to MGAs stepping in
where insurers have stepped out. First,
MGAs can offer greater flexibility
in underwriting appetite. Typically,
an insurer is a large corporate entity
with more complex frameworks and
processes they need to work within,
whereas MGAs can potentially be
slightly quicker to react to market and
customer changes when needed.
Second, while not completely
immune to insurers withdrawing
from the market, if an MGA loses
its capacity insurer, they tend to
be geared up to quickly sourcing
alternative capacity from another
insurer. This reduces the impact on
providers like Paymentshield, and in
turn the end customer, by ensuring
the robustness of the panel can be
preserved to the best possible extent.
Finally, there is a cost consideration.
Any gaps in the market do tend to
generate an increase in prices, and
MGAs are helping to fill that gap.
Oen, they’re able to negotiate rates
directly with the insurer, allowing
them to operate competitively,
and they have an element of
autonomy that allows them to
target certain property profiles with
stronger pricing.
Agile updates
The second big trend we’re seeing
also relates to pricing. There has
been a move in the market towards
the IHP model. This model feeds risk
details directly from an adviser-facing
platform – such as our Adviser Hub
– to insurers or MGAs and allows for
‘real-time’ pricing.
It means that insurers and MGAs
can adjust pricing in response to
market conditions and insights into
customer profiles, rather than relying
on pre-determined pricing structures.
This could mean updates to products
in days, or even hours.
The other big bonus to IHP is that it’s
also able to integrate with a range of
enrichment data points, such as credit
scoring and geographical checks.
LOUISE PENGELLY
is proposition director at
Paymentshield
We believe an
effective insurance panel
isn’t just about quantity,
it’s about having the right
blend of insurers that
provide breadth of cover”
This in turn allows for a greater level
of underwriting sophistication, and
subsequently, more accurate rates.
The majority of Paymentshield’s
home insurance panel is now on
the IHP model. Over the past year
or so, we’ve been working hard to
accelerate this transition, which
allows for communication between
the information advisers feed into our
platform and the IHP product of an
insurer or MGA.
So, home insurance panels might
be changing in their make-up and
processes, but they remain a real
strength. When done well, they offer
greater flexibility and availability
within a competitive framework,
and help ensure clients are subject to
less market volatility. The two trends
outlined above are certainly adding to
this value.
This can be really important context
for advisers when discussing GI with
clients, helping them to position the
value they’re able to add and the type
of cover they can access.
For clients, it can serve as further
reassurance that their home insurance
journey will end in securing the right
product for them at the right price. ●
February 2025 | The Intermediary
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