The Systems Conversation MGAs Avoid Until a Capacity Provider Forces It

There is a conversation that happens in most growing MGAs at some point. It is triggered by one of three events: a capacity provider review that raises operational questions the MGA struggles to answer, a bordereaux submission that fails validation checks, or a compliance visit that identifies gaps in the audit trail. The conversation is about systems - and by the time it is forced, the options are more expensive and more urgent than they needed to be.

The systems question that MGAs avoid is not "which platform should we use?" Most MGAs have already answered that. They are on Acturis, Applied, CDL, or SSP - or some combination of systems that have accumulated over years of growth. The question they avoid is more uncomfortable: is the current system configuration actually supporting how the business operates, or is the business running its operations around the gaps and limitations in its systems?

This is an important distinction. A business that has adapted its processes to work within its system constraints is not necessarily in difficulty. A business that does not know which of its operational practices are workarounds - and therefore does not know which of its management information outputs are reliable - is carrying invisible operational risk.

What are capacity providers actually asking?

Capacity providers - whether Lloyd's syndicates, London market carriers, or regional composite insurers - are asking operational questions during MGA reviews that they did not ask routinely five years ago. The shift is driven by a combination of Consumer Duty obligations, increased scrutiny of delegated authority arrangements, and a more competitive capacity market in which operational credibility is becoming a differentiating factor.

Four questions are appearing most consistently in capacity provider reviews:

How is your bordereaux produced, and how long does it take from month-end close to submission?

This question is testing two things: the reliability of the data pipeline from policy administration to bordereaux output, and the manual effort required to produce a submission. An MGA that takes two weeks to produce a bordereaux and requires three people to reconcile it is signalling something different from one that produces it in two days from a largely automated extract.

What is your data error rate on bordereaux submissions, and how do you identify and correct errors before submission?

Bordereaux error rates are a direct signal of data quality in the policy administration system. An MGA that cannot answer this question - because it does not systematically measure error rates - is telling the capacity provider that its data quality management is reactive rather than proactive.

How do you monitor borderline or unusual risks across your book in real time?

This is a Consumer Duty and underwriting oversight question simultaneously. The capacity provider is asking whether the MGA has the operational visibility to identify risks that may have drifted outside the agreed binding authority parameters, or customers whose risk profile has changed in a way that requires intervention.

If we asked for a specific data cut, how long would it take to produce it?

This question tests the flexibility and accessibility of the MGA's data architecture. If the honest answer involves a significant manual exercise or an "it depends on what our system can export," the operational data infrastructure is limited in ways that will become more constraining as reporting requirements increase.

The most common system configuration failures in growing MGAs

Bordereaux production that has outgrown its original design. Many MGAs built their bordereaux production process when they had one or two capacity providers and a manageable book. Growth has added providers, sub-classes, and distribution channels that the original process was not designed to accommodate. The result is a bordereaux process that requires increasing manual intervention and produces increasing error rates - not because the system is inadequate, but because the process has not been redesigned as the business has grown.

Policy data that exists in multiple places. Growth through acquisition, the addition of new systems for specific products, and the informal proliferation of spreadsheets as operational workarounds creates a common problem: policy data exists in more than one system, is not always consistent between them, and requires manual reconciliation to produce a coherent view of the book. This is not primarily a technology problem - it is an operational process and governance problem that technology investment alone will not solve.

Reporting that describes the past rather than managing the present. Management information that tells leaders what happened last month is useful. Management information that tells them what is happening in the current period - which risks are approaching renewal, which claims are approaching resolution, which distribution channels are performing against plan - is what enables operational management rather than historical review.

The investment case most MGAs underestimate

The cost of addressing bordereaux management, data quality processes, and management information infrastructure in a £5m to £20m GWP MGA typically runs between £40k and £150k depending on current system configuration, the scope of process change required, and whether the existing platform can support the required outputs with configuration rather than replacement.

Those numbers feel significant. They are not significant relative to the cost of a capacity provider withdrawing their line, reducing their appetite, or imposing operational conditions that constrain growth. The capacity relationship is the business. Operational credibility with capacity providers is not a compliance exercise - it is a commercial one.

The conversation most MGAs need to have is not "can we afford to address our systems?" It is "what is our current operational infrastructure signalling to our capacity providers, and is that signal consistent with the relationship we are trying to build?"