Aviva wants to create more MGA partnerships, with capacity deals expected ‘soon’

Aviva has confirmed that it wants to cement more partnerships with MGAs this year, as the insurer’s broker distribution director, Michelle Taylor, revealed to Insurance Times that the firm has “got quite a few conversations on the go at the moment” regarding capacity deals and that she “expects [Aviva] to do something soon” around this.

Speaking exclusively to Insurance Times, Taylor noted that Aviva has “historically” dabbled in backing MGAs – including providing capacity for two personal lines and two commercial lines MGAs, including Touchstone and Q Underwriting.

However, she is keen to build out this capacity footprint by supporting MGAs that “offer some different distribution”, can collaborate on the creation of new products, or that have expertise that Aviva does not.

She explained: “If there’s something niche or specific and they’re the experts in it, then we’ll be very interested. We’ve got quite a few conversations on the go at the moment. If [an MGA] can offer some different distribution to us, then we’d be interested in that. We’re not going to do something just for the sake of it. We don’t want it for scale or anything like that.

“We’re constantly curious and looking for things. We get approached all the time for capacity. We’ve got quite a lot of conversations we’re having at the moment, but I would expect us to do something soon.

“What space will that be in? I don’t know yet, but we’re definitely open. We’re always open to different things.”

More than just capacity provision

However, Taylor emphasised that she does not just want Aviva to supply capacity to MGAs. For her, she wants to develop partnerships with these businesses, which she views as very different to a strict capacity provision arrangement.

She defined this type of partnership as being where both Aviva and the MGA can see and reap value, with both parties having “the freedom to grow and do things together without it feeling like [Aviva has] given [the MGA] capacity”.

Taylor explained: “It’s about value to both.

“We want [MGAs] to be successful. [We] don’t want to check [their] homework. We’re partnering with [a particular MGA] because we believe [it has] got expertise in [a certain] space.

“We’re happy to do capacity as well, but we’d much rather do a partnership in the MGA space because it’s really important.

“[These types of deals] can be really long-term contracts and over a five-year [or] 10-year period, a lot of things can happen. So, if you don’t like each other as partners, that could go pretty badly quite quickly. You’ve got to start with a partnership and then see if everything else stacks up.”

In terms of what Taylor considers when reviewing potential MGA partnerships – alongside her colleague Brian Spinks, head of new business, whose team is leading the development of these collaborative opportunities – she noted that she looks at an MGA’s behaviours, strategy, trading style, brand and its values.

Backing the MGA buzz

Taylor added that she had observed market-wide interest in the MGA sector grow across recent months, in part driven by insurer behaviour around service dips and product gaps – although she does not include Aviva in this analysis, of course.

“From a distribution perspective, there’s a reason people are using MGAs and it may well be [because of] a gap in terms of products, or it may be [that] they can’t get service,” she said.

“[MGAs] can be nimble. If there’s something they can do better, why wouldn’t we back them and support them?

“Brokers need to serve their customers. If they can’t get hold of other insurers – they can always get hold of us – then you can see why they would go down that route.

“A lot of [the interest in the MGA market is based on] speed of response, or [access to] a different product, or a different area that’s quite niche that maybe we don’t do.”