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Virtual MGA

Key product: online insurance products distribution platform

Over the last 20-some years working in a number of insurance industry roles, Jake Hampton has learned what energizes him: making insurance transactions easier for everyone involved. The 2007 launch of Virtual MGA was an outgrowth of that passion.

“Virtual MGA—a product created by insurance people for insurance people—is a culmination of work over the years,” explains Hampton, CEO of the Austin, Texas-based company. “We help MGAs put programs online for their retailers to access 24/7, offering instant gratification.” Virtual MGA is a transaction platform that facilitates the placement of program business. While that’s true, it’s just the tip of the iceberg.

Virtual MGA specializes in facilitating the distribution of insurance products between managing general agents (MGAs) and their retail trading partners, primarily in the excess and surplus lines market. The company has created a Web-based trading platform for managing general agencies (MGA) to distribute their insurance products over the Internet so that they can interact more efficiently with retail trading partners. The transaction platform can provide all the functionality required to complete an insurance placement: rate, quote, request to bind, bind, policy issuance, endorsement processing, certificate management, bordereaux production, and in some cases, surplus lines filings.

The Web-based solution delivers soup-to-nuts automation of retailer/program administrator interaction. “It quickens the entire transaction cycle,” Hampton notes. “Retail agents and brokers can get a policy on the same day or even in the same session, in some instances. Agents can also get quick rating indications so they can more effectively communicate with insureds.”

Rating engines are customized by program. Virtual MGA offers rating functionality for multi-state programs and multiple lines of business for a single program going back to a single carrier. The platform moves the data entered at the application stage from rate to quote to bind to issue seamlessly. Policies can be issued automatically or sent to an underwriter for review and issue if desired.

Another benefit for retail agents is the ability to instantly determine risk qualification. “Underwriting appetites change regularly, and marketing departments are challenged to get the word out to their retailers. With the Virtual MGA platform, the rules engine stores all the rules so that any changes are instantly available to the retailers without them having to go to a manual to look up the program guidelines,” says Hampton.

The platform has big benefits for MGA employees as well. They are no longer required to perform many manually intensive tasks. Since the platform performs the rating and proposal production, underwriters only have to look at transactions when the retailer wants to purchase. According to Hampton, “There is a significant amount of time savings if underwriters are only looking at transactions that are requests to bind. If an MGA has a typical hit ratio of 20%, then they are rating, quoting, and proposing five quotes and only writing one. With Virtual MGA, the underwriter can focus their effort on accounts they are more likely to write.”

The platform now has an additional module that performs aggregate tracking. “There is great demand for the ability to manage aggregates and contracts,” Hampton says. “Until now, that’s been done on Excel spreadsheets. With our new tools, management can see in real time where their aggregate exposure is and underwriters know if they have capacity in a given area.

“We’re in the business of helping MGAs connect with their trading partners electronically,” Hampton explains. “Virtual MGA allows program administrators to rent software instead of paying for and maintaining expensive custom systems or generic systems that do not really fit the way they do business. It’s designed for program-type business, not every class code for every line of business and state. It is a low cost way to automate an insurance program.”

That’s Hampton’s message to program administrators. Target Markets Program Administrators Association is the ideal place to share that message. “It’s the exact customer profile we’re looking for,” he says. “We focus on people with programs that are unique, but that have standardization within the program. We let MGAs focus on production, while we help with distribution.”