Rising Dependencies on Technology and a Remote Workforce Require Agents to Re-assess their Managed Services Providers

Technology for agents is rampant. A bit of automation and integration enables time savings, cost reduction, and renewed focus on value-added customer advisory services. As we now embrace a modified work environment that hybridizes in-office and remote productivity, the evolution of agency operations will undoubtedly pave the way for additional innovation.

With the spotlight shining bright on technology platforms for agencies, we often overlook one variable in the equation that is becoming more important as solutions multiply and the average IT infrastructure becomes more complex: managed services providers (MSPs).

Large enterprises benefit from the attention of sophisticated MSPs. Matrix-based organizations offer scale through an aggregation of users that creates standardization and a predictable price per head. Conversely, the overwhelming majority of IAs are categorized as small businesses and not aggregated under any one parent company. Therefore, IAs typically partner with local MSPs that experience greater resource constraints due to their reliance on a one-to-one sales model mixed with a minimally priced service fee. Community dentists, attorneys, florists, and agencies are treated agnostically, creating ample opportunity for unintentional solution gaps in any one industry.

There is a necessity for MSPs to understand and meet the detailed E&O and cyber security policy requirements that agencies procure—in many cases—through their trusted association, network, and carrier partners. Now more than ever, the quality and efficacy of MSPs supporting agencies should be revisited and audited.

When sitting down with your existing partner or interviewing a new MSP, ensure that you present the company with copies of your E&O and cyber security policies. Do not accept flippant responses like “oh yeah, we do that, so check the box under ‘yes’.”  If you are utilizing or plan to utilize the MSP’s policies as a proxy exhibit, require proof beyond the affirmative for scenarios like:

  • Conducting penetration tests conducted on the applicant’s network annually
  • Utilizing firewalls, anti-intrusion and anti-virus software or programs
  • Possessing a computer security breach incident response plan
  • Encrypting client sensitive information on mobile devices while in transit or in rest

With rapid changes occurring in the workplace and through the advancements of technology, the impact on an agency’s IT infrastructure is peaking. In order to ensure the agency is complying with its commercial coverages and to realize their protective benefits in the unfortunate event that a cyber incident occurs, agents should put their MSP under a microscope now and align with a partner that understands and respects the industry.

Jason Walker is the CEO of Agency Insurtech, a company built to connect insurance professionals and technologists while advancing independent insurance agencies.

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