At Accelerant, we believe in empowering our Members so they can better serve their clients. One key element of our model is empowering entrepreneurial underwriters to start their own MGAs. We spoke with Phil Terrill, the founder of SoleSafe, an Accelerant Member that offers the ultimate in sneaker insurance, for his tips for starting your own MGA.
We had a front-row seat to the journey: Aaron DiCaprio, the U.S. Head of Programs at Accelerant, coached Terrill through every detail with a customized plan as Terrill worked to build the product, obtain funding and move forward.
According to Terrill, underwriters and entrepreneurs who make the decision to launch their own MGAs are “pleased with their decision to take a chance and really bet on themselves.”
His top three tips are:
- Ask yourself “what do you want out of it?” Potential responses include freedom, lack of bureaucracy, accountability, faster decision-making, better lifestyle and being more than a number. “Probably the most important incentive in owning your own MGA is equity, which, when sold at a multiple of EBITDA, can be extremely lucrative,” he added. “It’s really the partner and investor that adds value beyond just money. They should be trusted strategic advisors that can help you grow your business.”
- Then ask, “what do investors want?” The top four, according to Phil, are expertise, distribution, skin in the game and a solid return on investment: “You need to know your craft, you need to know it well. They’re looking for something unique. Finally, your investors aren’t a charity. They’re going to want to see a nice return.”
- Finally, “what does your carrier partner want?” In his discussion, Phil noted that carrier support is the most important component to launching an MGA. Specifically, they are seeking partnerships with a proven track record of success, industry expertise, built-in infrastructure, distribution and data—“realms and realms of data” showing “a path to profitability.”
“In closing, launching an MGA isn’t for everyone,” he concluded. “There’s a lot of success stories out there; however, it’s very high risk, and with high risk comes high reward.”