Growth in the schemes and delegated authority (DA) market has accelerated rapidly over the past decade, and as more brokers launch MGAs and more insurers compete to issue capacity, the landscape has started to feel rather crowded. While others are racing to enter the market or to scale up their operations, AXA is operating from a deeply embedded position, one shaped by decades of experience and defined by long-term partnerships, with a strategy built around expertise and longevity, rather than short-term gains.
“The market has had a bad name in the past, with people chasing growth over profitability” says Joel Markham, Director of Schemes and DA at AXA Commercial.
“But those days are long behind us now. There is so much more professionalism in this market and there’s now a very different appetite around DA business, but you have to do it properly,” he adds.
That shift has triggered a wave of new entrants. Consolidators with MGA strategies, brokers developing niche propositions and trade body-backed schemes are increasingly common, or as Joel puts it: “You only need to look at the growth of the Managing General Agents’ Association which has around 430 members now. The support and protection it provides to the sector has never been more prominent or important.”
Expertise and distribution
But while many are trying to establish themselves in this increasingly lucrative space, AXA has been building depth for years, attracted by the specialist expertise and distribution DA partners bring.
“They are experts in very specific areas,” says Markham. “We partner with them because we always want to work with people who are experts in what they do. DAs provide that as well as being able to access distribution channels we can’t.”
It was this belief in expertise that drove AXA’s decision to invest heavily in a fully dedicated DA proposition. Rather than outsourcing or folding schemes into the broader business as many in the market do, AXA built a specialist structure with underwriting, relationship management, wording specialists, new deal implementation, claims and pricing all handled in-house.
“Managing schemes and DA business is all the team do, every day,” says Joel. “Managing everything in-house means we can engage pro-actively every aspect of the relationship which allows us to be very flexible in how we set up and operate a scheme.”
That infrastructure, fuelled by five years of sustained investment and growth, has delivered tangible results. AXA boasts several DA relationships that span decades - one scheme has been written consistently for 38 years - and it has been recognised as Schemes Insurer of the Year for three years running. But Joel is quick to stress that AXA is not simply defending its position. Instead, it is focused on pushing even further ahead.
“The real opportunity is around data, AI and technology,” he says. “Data transfer has always been clunky in the DA space and everyone has the same issues but we’ve invested in a new system, and we’re using AI and robots to deal with unstructured data.
“So when DA partners are transferring data to us, it doesn’t have to be done the ‘AXA way’. We can take it in multiple formats as we’ve automated that process which means we’re very easy to deal with when it comes to bordereaux processes.”
That flexibility enables AXA to trade faster, remove friction and give more time back to its people who can instead focus on developing existing partnerships and identifying new ones. But what is AXA looking for in a new scheme proposition?
Backing DAs for the long term
Joel says there has to be a clear purpose for the scheme, a credible distribution strategy and a proposition that brings something distinct to AXA’s wider DA portfolio. If an idea passes the various tests, AXA will back it for the long term. Rather than short annual agreements, the insurer typically offers three- to five-year capacity deals, providing partners with the stability they need to build for the long-term.
The result of this approach is exceptionally strong retention: “We’ve only lost out on a couple of partnerships in the last few years,” says Joel, “and I’m really proud of that as it proves we are doing things in the right way.”
As AXA grows with existing partners, it is also exploring new sectors having entered four new product markets in the last three years. This desire to explore new territory and find new ways of managing risk has seen the AXA proposition evolve as customer and brokers needs have changed over the years.
“The risks our customers face today are very different to those of five years ago, and they will be different again in the future,” says Joel. “The schemes approach to managing risk is well designed to address those shifting needs.”
No complacency, only confidence
As the market expands and more participants chase scale, Joel believes AXA’s depth of expertise, longevity in the DA Market, underwriting discipline and willingness to let the experts do what they do best, will be key differentiators.
“We’re comfortable empowering our partners to do the underwriting because we pick the right people to partner with,” he says.
Looking ahead, growth is the goal, but only through the right partners, with the right data foundation and the right sector expertise. Investment will continue, particularly in systems and data management, with a continued focus on giving underwriters the autonomy and flexibility they need to build productive and profitable trading relationships.
“It’s a fascinating space to operate in,” Joel says. “People are always surprised at our scale and our product capability in DAs and we plan to continue to grow even bigger through our consistent strategy and thanks to the team and are partners we are in really good shape. We just want to get more efficient in everything we do; and help our partners achieve their goals.”
There’s no sense of complacency, but there is a confidence – based on past performance and current partner loyalty – that AXA can secure even more DA partnerships and an even greater share of this market. For brokers and DAs who bring true sector expertise and ambition, AXA is not just staying in the game, it’s accelerating at pace.
