When Toby Gorman (pictured) was selected to join Consilium, the international broking arm of Aventum Group, he was welcomed because he brought “strong relationships in Lloyd’s and other markets, and strong relationships in the MGA and cover holder space”.

Having been a specialist in the delegated authority business for over 25 years and holding senior roles at Arrow Risk Management, AXIS Capital and Novae, he joined Consilium’s Delegated Risk Solutions (DRS) business as a partner in March 2023. Joining the team was a natural next step. For him, he said, not least because of the DRS team’s reputation in the Lloyd’s and London markets, its employee-owned and debt-free structure, and its entrepreneurial culture.

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What’s happening in the cover holder market today?

It’s an interesting time for the cap holder market, which faces a number of fundamental challenges, including those related to data. He said there is no shortage of opportunities for MGAs to innovate and expand into new markets, but there is a perceived lack of data, which is a real stumbling block when it comes to carriers moving forward, making it difficult for new MGAs and startups.

“Coverholders need the capabilities to handle, analyze and act on massive amounts of data to improve decision-making if they are to differentiate on the basis of expertise, innovation and value-added services,” he said. “The complex and constantly evolving global regulatory landscape and compliance costs remain a challenge.

“Coverholders must invest in reducing administrative burden and improving operational efficiency through automation and digitalization. However, there is always a flip side of course. With increasing digitization, coverholders are exposed to cybersecurity threats and must therefore up their game in terms of mitigation and prevention measures.”

What opportunities are shaping the market?

When it comes to opportunities, customers want more user-friendly, comprehensive and tailored insurance products, he said, and MGAs are ideally placed to lead from the front in delivering them. Insurance coverage holders can differentiate by developing innovative insurance products tailored to meet customers’ evolving needs and emerging risks, such as corporate cyber insurance or modular natural disaster insurance.

“(Additionally), collaborations with insurers, reinsurers and other industry stakeholders can provide coverholders with access to new technologies, distribution channels and expertise,” he said. “And of course, harnessing the latest advances in technology, such as artificial intelligence, machine learning, and blockchain (can) provide innovative solutions to improve underwriting accuracy, risk management, and customer experience.”

Where do MGAs and MGUs need the most support?

Identifying some of the critical areas where MGAs and MGUs need support when navigating the current environment, he noted that these companies often need support in areas such as technology adoption, data analytics, risk management, compliance, portfolio diversification, access to specialist expertise and Markets. Getting ahead in all of these areas can help them navigate the market more effectively and stay ahead of the game.

Support in terms of accessing carrier partnerships, negotiating favorable terms, diversifying their portfolio, as well as developing innovative insurance products tailored to customers’ evolving needs and emerging risks, is essential to maintaining competitiveness, he said.

“That’s why DRS has seen such rapid growth,” he said. “We can offer coverholders access to A-rated carriers in both the Lloyd’s and London markets. Once capacity is secured, we deploy our deeply experienced technical, digital and actuarial teams to help manage continued profitable volumes, and design innovative schemes and facilities that drive growth.

“We are pushing the boundaries of technology, bringing together, for the first time, actuarial insight and global reinsurance/insurance expertise in capacity sourcing and volume management. This means we can push even harder at the frontiers of what is possible.

Where does the market go next?

Offering his opinion on the overall health of the cap carrier market, Gorman is “quite optimistic” about the next trend. He said that despite the challenges, there are plenty of opportunities for growth and innovation, and with the right strategies and adaptability, the market can continue to thrive and provide valuable insurance solutions.

There are several factors that contribute to Gorman’s optimism. He highlighted how market growth provides opportunities for cover holders to tap into new markets, diversify their portfolio and expand their businesses. He said the pace of innovation is constantly offering new and exciting ways to enhance offerings, improve operational efficiency and support growth ambitions, as well as a growing desire to embrace strategic partnerships between industries.

“Coverholders are also increasingly focusing on providing value-added services, personalized experiences and innovative insurance solutions tailored to customer needs,” he said. “Finally, despite facing challenges such as natural disasters, economic downturns and global pandemics, the cover holder market has demonstrated resilience and the ability to adapt to changing market conditions, effectively manage risk and innovate in response to emerging trends.

“The future is bright.”

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