Introduction

Setting up a Managing General Agent (MGA) means navigating a complex landscape of technology decisions. Should you build your own tech or leverage existing solutions? What systems are truly necessary? It’s easy to feel overwhelmed. At Functional Finance, we believe in keeping things simple, efficient, and focused.

From underwriting tools to billing systems, this article explores the essential components of an effective tech stack. We’ll walk you through the core systems every MGA needs—Policy Administration Systems (PAS), Claims Management Systems, CRM, Billing, and General Ledger (GL)—and share some vendor suggestions to help you avoid the time-consuming process of building your own tech.

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Policy Admin Systems: The Backbone of Your MGA

The most critical piece of your tech stack is a robust Policy Administration System (PAS). This isn’t just another piece of software—it’s the foundation of your entire operation. A good PAS will manage policies, streamline underwriting, and handle basic billing functions. If you choose wisely, you may even find a platform that includes claims management, eliminating the need for additional systems.

Examples:

• Guidewire InsuranceSuite: Known for its powerful policy, billing, and claims management capabilities, Guidewire is a favorite among larger MGAs. Its high level of customization comes at a cost—it can be complex and expensive to implement, making it better suited for MGAs with extensive IT resources.
• Majesco: This cloud-native, API-driven platform is ideal for MGAs looking to transform digitally. Its digital capabilities are strong, but integrating with legacy systems can be both challenging and costly. The long customization and implementation process is something to keep in mind.
• Instanda: Offering a no-code platform, Instanda is designed for MGAs who need quick deployment without extensive IT support. Its configurability allows for rapid adaptation to market changes, though highly complex needs may push the platform's limits.
• Joshu: An MGA-focused system known for its ease of use and rapid implementation, helping streamline policy administration and underwriting processes. Its user-friendly interface is a plus, but it may lack some of the advanced features and scalability needed by larger or more complex MGA operations.
• Socotra: This flexible, API-driven core insurance platform is ideal for MGAs focused on innovation and rapid product development. While its flexibility is a game-changer, it may come with a steep learning curve for those without dedicated IT teams, and smaller MGAs may find it overwhelming.
• PolicyFly: Designed specifically for MGAs, PolicyFly offers efficient, cloud-based policy administration, especially for specialty lines. It’s easy to use and quick to deploy, though its features are not as extensive as some of the larger PAS systems on the market.

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Claims Management Systems: Streamlining the Claims Process

Most MGAs outsource their claims to a Third Party Administrator (TPA) to handle claims end to end. For those that do not, managing claims effectively is crucial for any MGA as claims is a cornerstone of the insured experience. A good Claims Management System ensures that claims are processed quickly and accurately, improving customer satisfaction and maintaining your reputation. The right tool will integrate smoothly with your PAS and provide simple user interfaces,  real-time updates, detailed reporting, and streamlined workflows.

Examples:

• Reserv: Reserv offers a cloud-based claims management platform designed to simplify the entire claims process. It focuses on efficiency, providing automated workflows, real-time data tracking, and comprehensive reporting tools. While it excels in streamlining claims operations, its heavy reliance on cloud infrastructure might be a consideration for MGAs with specific data security concerns or those operating in regions with limited internet reliability.
• Guidewire ClaimCenter: Part of the broader Guidewire InsuranceSuite, ClaimCenter is a robust claims management system designed for MGAs who need extensive claims handling capabilities. It integrates well with other Guidewire products and provides a comprehensive, end-to-end claims process, though it may be too complex and costly for smaller MGAs.
• ClaimVantage: A cloud-based claims management system that offers strong automation capabilities, particularly suited for MGAs dealing with high volumes of claims. Its flexibility and comprehensive reporting tools are major advantages, but it may require significant customization to fit specific MGA workflows.

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CRM: Keeping Relationships Front and Center

A robust Customer Relationship Management (CRM) system is essential for managing client interactions, tracking sales pipelines, and driving business growth. A good CRM will help you manage relationships with brokers, agents, and customers, ensuring that nothing falls through the cracks. For MGAs that have direct relationships with customers, we recommend a tools that marry CRM with agency management systems (AMS) to offer a more integrated one stop solution.

Examples:

• Salesforce: The industry standard for CRM, Salesforce offers unmatched customization and integration capabilities, making it a top choice for MGAs of all sizes. Its vast ecosystem of apps and tools allows for deep customization, though it comes with a high learning curve and a premium price tag.
• HubSpot: HubSpot provides a more affordable and user-friendly alternative to Salesforce, with strong lead management and marketing automation features. It’s ideal for smaller MGAs or those looking for a less complex CRM, but it may lack some of the advanced customization and integration capabilities of Salesforce.
• AgencyBloc: Although originally designed for life and health insurance, AgencyBloc has expanded its capabilities to serve P&C MGAs as well. It combines AMS functionalities with CRM features, offering a holistic approach to managing clients and policies. Due to its origin in L&H, AgencyBloc may lack some advanced features and tools that are standard in systems specifically designed for P&C insurance.

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Billing: Simplified, Not Overcomplicated

Billing doesn't have to be a headache. If your PAS doesn’t come with robust billing features (most don’t), look for an add-on that integrates invoicing, payment processing, money movement, treasury management, and reporting. One critical factor to consider is whether your billing system includes payment processing. If it doesn’t, you’ll need a separate system, adding complexity to your tech stack.

Whether it's ACH, credit card, or digital wallet payments, a streamlined billing system with integrated payment processing ensures you get paid on time—without the hassle of managing multiple tools. Beyond that, an effective billing solution will also support all the back-office needs of your financial operations teams, ensuring smooth and efficient financial management across your MGA.

Examples:

• Guidewire: Comprehensive billing capabilities with strong configurability. It seamlessly integrates with Guidewire’s other products, offering a cohesive system. It does tend to be much higher in cost and implementations can be lengthy and resource intensive.
• Stripe: A widely used payment processing platform that integrates easily with many systems, providing a seamless payment experience. However, Stripe is primarily designed for general billing and e-commerce, lacking specific insurance-related features and provides more limited functionality.
• Worldpay: Worldpay is a global leader in payment processing, offering robust solutions for insurance companies, including premium collections and recurring billing. Its strong global presence and extensive support for different payment methods make it a versatile choice for MGAs operating in multiple regions. However, its broad focus means it may not offer the specialized features needed for more complex insurance-specific billing scenarios.‍
• Functional Finance: We built Functional Finance as the Goldilocks for MGAs looking for alternative billing solutions. It’s purpose built for insurance operators with features tailored specific to the needs of MGAs throughout the lifecycle of a policy. Seamless integration with PAS systems also ensures that financial data is accurate throughout the technical ecosystem. Moreover, our Billing System includes Payment Processing which many billing vendors do not include.

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General Ledger (GL): Simplified, Not Overcomplicated

The General Ledger is the backbone of your financial accounting, capturing all financial transactions to ensure accurate financial reporting. A well-integrated GL system will seamlessly connect with your billing and policy administration systems, providing real-time insights into your financial health.

Examples:

• QuickBooks Online: QuickBooks is a popular choice for MGAs, offering robust GL features with easy integration into other systems like billing and CRM. Its user-friendly interface and strong reporting capabilities make it ideal for small to mid-sized MGAs, though it might not scale well for larger operations with more complex financial needs.‍
• Sage Intacct: Sage Intacct provides a more advanced cloud-based GL system with strong financial management capabilities, including multi-entity support and advanced reporting. It’s well-suited for larger MGAs or those with more complex financial structures, but its implementation can be complex and costly.

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But, how do I pick?

With all the possible options out there (and there are many more than we listed), choosing can be difficult. When selecting the components for your MGA tech stack, consider the following evaluation criteria to ensure you select the right tools for your needs:

• Functionality: Does the solution cover all necessary aspects of your operations, such as policy administration, billing, CRM, AMS, and compliance?
• Ease of Integration: How well does the software integrate with other systems in your tech stack?
• User Experience: Is the platform intuitive and user-friendly for your team?
• Scalability: Can the software scale with your business as it grows?
• Vendor Support: What level of customer support, training, and ongoing assistance does the vendor provide?
• Cost: Are the pricing and licensing models flexible and affordable, with options that match your budget?

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Conclusion: Start Simple, Scale Smart

At Functional Finance, we believe in focusing on what matters. A streamlined tech stack not only reduces costs and complexity but also sets your MGA up for scalable success. Start with the essentials and add more only as your business demands it. After all, success in the insurance industry isn’t about having the most tools—it’s about having the right ones.

Your MGA is unique. Your tech stack should be, too—purposeful, powerful, and perfectly aligned with your goals. Keep it simple. Keep it functional.