A recent article in The Insurer declared: “MGAs under close scrutiny from reinsurers”. It hasn’t always been that way. For many years, gut feel and a stiff dose of blind faith were all that insurers had to go on. Combined with top-line commissions, their trust wasn’t always rewarded. The names Sasse and Harrison still send shivers down some Lime Street spines.

It sometimes seemed that markets kept their eyes wide shut. Years ago, as a data-fancying young underwriter, I took responsibility for a particularly scrappy book of delegated business. To get to know it, I chased the brokers for the bordereaux. Their responses ranged from bemusement to anger: no one had dared to ask before!

When the documents finally arrived, in the form of bundles of connected papers with perforated strips of holes at each side, I could see why no one else had bothered. They contained very little, and the information included was of such variable quality that my whole physical-data-collection effort was almost pointless.

Things changed with the introduction of Lloyd’s Minimum Standards. They induced a dramatic improvement in the data coverholders sent to carriers. It was like an upgrade from cave paintings to oil on canvas: a baseline level of clarity about each risk and claim was now required. Minimum Standards underpinned the revival of giving the pen away.

Clarity began to arrive by email, compiled in Excel spreadsheets, not those endless, accordioned, dot-matrix printouts. It was like an upgrade from carrier pigeon to telegraph. (In the interim were unscrapable pdf images of those same printouts, but this penny-post, pony express period was mercifully short.)

Getting useful risk data is like a drug to us underwriters. Once we taste it, we need more. But since each line of business is different, the data hit we need varies remarkably. That made data standards a challenge, but that’s a topic for another time (see Diaries passim).

Once basic data transfer was conquered, MGAs proliferated. The business model has proved sound, but those putting their capital at risk need ever-better hits of data. They have aggregation interests and reporting requirements of their own, just two reasons why underwriters now demand complete coverholder transparency.

Forget paintings: they want hyperspectral imagery contained in incontrovertible corporate data treasuries that provide a single source of truth. And scrap the telegraph. Instead of simply sending, they now want the equivalent of data videoconferencing, where everything is live on their screen.

In other words, it’s time to replace bordereaux with read-only access to underwriting platforms and on-demand aggregation-reporting, all backed by live data feeds. Everything else is just old tech.