Sam Kramer is the CEO of Desq, partnering with entrepreneurial underwriters as well as technology companies to launch and manage unique, specialty, MGAs. Sam was interviewed by Michael Fiedel, Co-Founder at Scout InsurTech and Co-Founder at PolicyFly, Inc.

Sam, what are some of the key qualifications that you are looking for when evaluating the potential of a new MGA concept?
“We're looking at a lot of things, the most important being the people. Ultimately, everything we're doing in insurance revolves around the skills of the underwriter and the relationships that they have. In the Desq business model, the people are typically one of two types - our ‘traditional’ opportunities involve partnering with a skilled underwriter looking to build their own MGA. We also partner with owners of innovative technologies that would benefit from an insurance product or whose product could improve an insurance product.
If we're happy with the people, we start looking at the overall business plan. There are a lot of great ideas out there that are either very expensive and/or complex to launch. We are seeking opportunities which, if successful, will generate substantial return relative to the expense and effort it takes to launch.
If we like the business plan, we'll look at whether Desq is a good fit as well, getting into some of the operational details. We give a lot of thought to how likely it is that capacity will come on board. We'll even start talking to capacity about the more likely opportunities, helping us refine each opportunity as well as focus on opportunities of interest to markets.”
Before an underwriter dives headfirst into becoming an entrepreneur in this space, what do you think they need to understand about getting an MGA off the ground?
“It's great to have that entrepreneurial drive, but it's a tough process. I think some of the things that many underwriters don't realize while working for a large organization is that your employer's brand really matters. Whether it's trying to get capacity from a carrier, or getting your foot in the door of a brokerage, the branding on your business card carries a lot of weight. The history of relationships and performance that came before you even joined the company is a big determinant of your ability to do business today.
As a small startup, you're going to have to fight a lot harder to do pretty much everything until you prove yourself. Particularly with distribution, it’s hard to get that book going, so you’ll be working harder in the first few years, relative to your work as an employee of a larger organization, if it’s going to be successful. But, the good news is you should be enjoying it more. At the end of the day, you're in a much better position to benefit from your labor.”
And when does working with Desq make sense as an alternative option for starting an MGA?
“We'll look at compatibility with Desq. Desq is a platform structured around efficiency and streamlining operations. If you have a big tech spend or large operations that you want to bring in—your own accounting division, or a large team of underwriters before you write your first dollar of business—that mindset runs counter to Desq’s operational strategy, and Desq might not be as good a fit.
However, if you do have this big plan that includes an IT platform, accounting capabilities, HR, and what have you, and you're comfortable renting those capabilities, then Desq can be a great place for you. We can set those up in a highly streamlined fashion and get your business deployed for significantly less capital than it would take to get going on your own.”
In terms of looking for future opportunities in the program space, where do you see the greatest opportunity for new programs to be innovative?
“We're seeing innovation in a few areas. One would be underwriting technology—bringing in new data points or more advanced ways of dissecting data to make underwriting decisions.
Another area is technology companies and service providers saying, ‘We have a whole lot of data on our clientele. Can we turn this data into useful underwriting information and monetize that for our clients’ benefit?’
We're also seeing innovations in risk management areas, where insurance policies are bundled with other risk management services that ultimately make insurance a safer risk.
We see many opportunities in the area of capital solutions, where you’re protecting against events that capital providers are wary of. By providing that protection, we can significantly reduce the cost of capital for the end user and create a real value proposition.
Lastly, we’re seeing new markets and products. The insurance coverage tends to be products that aren’t written today, and while they can cover emerging risks, this is not a requirement."