Insurance Rating Software: How MGAs Manage Rates and Serve Niche Markets

How MGAs Are Shaping the Modern Insurance Landscape 

MGAs, like carriers, aim to disrupt the market by innovating and introducing new insurance products through technology. What sets MGAs apart is their deep local specialization. Unlike carriers that cater to broad markets, MGAs, particularly in commercial, specialty, and excess & surplus lines, focus on specific regions, often serving rural or underserved areas. Their deep understanding of local needs and risks, combined with the capabilities of insurance rating software, enables them to design custom insurance packages, such as combining commercial property and general liability products that truly align with local business requirements.  

This regional insight, backed by commercial insurance rating software, enables MGAs to underwrite highly specialized, customer-focused products that traditional carriers often can’t match. 

What are some of the typical rate challenges MGAs face? 

While MGAs aim to move faster and be more agile than traditional carriers, they often encounter several challenges when managing rates effectively. 

1. Dependence on IT for Rate Changes: Most existing systems require MGAs to rely on IT teams to tweak rates, modify algorithms, or update tables, slowing down response time and creating bottlenecks. 
2. Inefficient Rate Versioning and Locking: A rate change shouldn’t affect existing bound policies, yet in many systems, version control and locking mechanisms are still manual or inconsistent. 
3. Difficulty Integrating with Rigid Systems: MGAs aim to integrate third-party data and AI models to enhance rating accuracy and improve risk scoring. But rigid existing systems make such integrations slow and costly, reducing efficiency. 
4. Limited Visibility and Rate Segmentation Control: MGAs struggle to visualize how rate changes impact regions or business lines, making it difficult to segment rates by region, industry, or customer profile, leading to pricing errors and limiting their ability to deliver hyper-targeted products to niche markets. 

What are MGAs' expectations for Rate Management? 

MGAs operate in fast-moving, specialized markets where agility and precision are critical. To stay competitive, they expect a modern rate management system that empowers them to move faster, customize better, and price smarter. 

To Gain Greater Control and Flexibility 

A local broker who understands customer preferences in a specific area can bundle products accordingly. However, if the broker wants more control, they may raise capacity by partnering directly with carriers and requesting authority to design their own product bundles. Once trust is established, the broker gains authority from carriers to design custom product bundles, however, they require software that allows for quick rate adjustments, experimentation within approved limits, and exploration of new opportunities in the market.  

Streamlining Form Creation for Niche Markets 

Unlike large carriers that rely on generalized and slow processes across multiple segments, MGAs focus on niche markets. For example, if an MGA targets restaurants, they can create a short, relevant questionnaire instead of a lengthy carrier form (200 questions). Additionally, by integrating third-party data sources, MGAs can enrich underwriting decisions and tailor coverage based on geographic risks. The rating system works seamlessly alongside the Insurance Underwriting Workbench to ensure pricing accuracy and support data-driven decision-making throughout the policy lifecycle, something only insurance rating software can enable. 

To Analyze Rate Impact and Maintain Consistency: 

MGAs need the best insurance underwriting and rating software that lets them draft, publish, and validate rates. But before publishing, MGAs must assess rate impact, how changes affect existing or upcoming quotes. For example, 

• If you increase rates slightly, will business drop? 
• If you decrease rates, how does it affect profit margins? 

Modern rate management software allows MGAs to evaluate such scenarios before implementation. It simulates rate changes and maintains control through maker-checker validation and handles exceptions or regulatory overrides, all without disrupting active quotes. 

Importance of insurance rating software  

As MGAs reshape the way niche markets are served, rating software has become a critical enabler rather than an option. It empowers MGAs to deliver accurate, transparent, and flexible pricing that adapts to evolving market demands. With automation and integration capabilities, rating software ensures faster quotes, consistent underwriting, and better risk management. Insillion’s insurance rating engine makes that possible by enabling carriers and MGAs to configure rates, test scenarios, and deploy rating updates instantly.  

With its configurable, no-code interface, MGAs can streamline rate management, integrate third-party data, and bring innovative products to market at speed.