An MGA or Managing General Agent is an individual or entity that acts as an insurance agent or broker for the insurer.  Typically, they would represent an insurance company in a particular territory or line of business, and would be responsible for the distribution of the insurer’s product in that particular area.

We’ve all heard the hype around Blockchain but what potential does it have for the insurance industry, and in particular for MGAs, and what benefits can it offer?

Blockchain and its uses in the insurance sector
Blockchain technology is already being applied across the insurance sector to provide better client experiences, improved data security, faster handling of claims, reduced administrative costs, access to smart contracts and enhanced analytics. Blockchain is a robust, well established technology that has been around and in use for years but it is still seen by many as ‘novel’ technology. 

Adoption of technology by the insurance sector and by MGAs
Up to this point the insurance sector has been slow in adapting to developments in technology and adopting new ‘Insurtech’ solutions.   To some extent this can be put down to the perceived high costs of deploying new applications and the risks associated with an overhaul of IT systems.   However, many major players within the insurance sector have and are utilising Artificial Intelligence (AI), predictive analytics, machine learning, Internet of Things (IoT), InsurTech and blockchain technology to deliver greater efficiencies, automation, productivity and better end user experiences.

Implementing technology for MGAs can make transactions quicker, more efficient, more transparent and more secure and MGAs are seen by many as the potential catalyst to fast-track innovation within the industry.

Can Blockchain disrupt the insurance sector and MGAs
The introduction of blockchain has disrupted the insurance sector and MGAs in the following ways:

• Disintermediation: blockchains have the ability to carry out verification tests, decentralise consortiums and issue self-executed transactions.
• Smart contracts: claims are generated automatically, alongside self-executing contracts which lead to a reduction in fraudulent activities.
• Increased efficiency: the digital nature of blockchains has reduced the chances of human errors such as data duplication and processes are carried out at a faster pace thus contributing towards time saving.
• Better pricing and risk assessment: the automatic data analytics carried out on the blocks of data and the availability of real time and up to date data has allowed for more accurate predictions and forecasting. 
• Affordability of insurance: blockchain constructs automated databases which simplify many processes and cater to challenges related to the affordability of insurance by offering micro-insurance as a solution.

Blockchain and its role in improving client experience
Due to its digital nature, blockchain has been able to track every step of the supply chain process and therefore has a record of the product’s history and any alterations. This helps in ensuring that the final product that the customer receives is completely authentic. As discussed earlier, the transparency supplied by blockchain helps in instilling confidence amongst customers about their purchase. This transparency also ensures that no entity is manipulating the process and final delivery of the product of service to the end user.

Blockchain provides customers with an efficient and simplified method of tracking, maintaining, transferring and making claims on their warranties. Customers don’t have to worry about paying intermediaries and can make direct purchases. There is also a reduced threat of hacking as blockchain ensures greater security.

MGA sectors worldwide and the impact of Blockchain
One of the main advantages of blockchain is that its decentralization means that access can be given to various parties securely allowing for better data management and analysis. Due to this access being granted to multiple users, the chances of the system getting hacked are far less. Each user has a history of the ledger therefore, if one user’s system gets hacked, the data will still be safely stored in the next user’s system.

However, access is only granted after proper identity verification which ensures that only authorized parties can access the data set. Blockchain can greatly impact the MGA sectors worldwide due to its improved and more efficient record keeping feature, ability to function with digital currency, issue smart contracts and offer greater security. 

Supermoney is a disruptive, innovative and highly customizable technology platform that simplifies the management of business networks and processes.  We work with best-in-class global partners to create technology products that are efficient, productive and highly effective and make Blockchain easy to understand, accessible and affordable to all.

To find out more about Supermoney or to see how we can help please get in touch – info@supermoney.co or visit www.supermoney.co