Firms can use soft market to advantage, suggests Guy Carp

By following five core strategies, managing general agents (MGAs) and managing general underwriters (MGUs) can maximize opportunities and succeed in soft market conditions, says Guy Carpenter & Company LLC.
The reinsurance broker’s paper, ‘Optimize in a Soft Market, Succeed in Any Market Five Strategies for MGAs and MGUs,’ outlines five key “high-gain” strategies for business improvement in a soft market. They include: business analysis; operational assessment and enhancement; business expansion and diversification; positioning and preparation; and capitalization and investment.
“While each of these strategies can lead to competitive advantage, attempting too much at one time especially in a soft market can be costly and unproductive,” said Carl Bach, managing director and head of Guy Carpenter’s Program Manager Solutions Specialty Practice.
With regards to positioning and preparation, Guy Carpenter recommends MGAs and MGUs use the current market to position themselves for rapid growth when conditions become more favourable.
“By searching for and developing new partners in new markets, firms can protect themselves through relationship diversification and benefit from greater alternatives in a hard market,” a release says.
“Likewise, the soft market represents an excellent opportunity for companies to analyse data, both to find soft market expansion opportunities and to plot a trajectory for growth when the market hardens.”