These offshore or nearshore centre’s — often located in India, Eastern Europe, or Southeast Asia — serve as dedicated extensions of the MGA’s core business, offering cost-efficient, high-quality support across underwriting, claims processing, customer service, IT, analytics, and compliance. For ambitious MGAs aiming to become tomorrow’s insurance giants, GCCs are not a cost-saving tactic — they are a strategic growth engine.
The Scaling Challenge for MGAs
Post-funding, MGAs face intense pressure to scale rapidly. Whether it’s launching new products, entering new markets, or enhancing tech capabilities, growth introduces challenges:
High Costs
Hiring local talent for specialized roles like underwriting or actuarial analysis is expensive, with salaries in markets like U.S
Operational Delays
Local teams may struggle to handle increased volumes, leading to backlogs in claims processing or customer inquiries.
Regulatory Complexity
Expanding into new regions requires compliance with diverse regulations, such as GDPR in Europe or NAIC standards in the U.S.
Tech Demands
Building platforms for policy administration or data analytics requires significant investment and expertise.
Relying solely on local resources can increase costs by up to 30-40%, slowing growth and eroding margins. MGAs need a scalable, cost-efficient solution—GCCs fit the bill.
GCCs: The Scalable Backbone of Modern MGAs
GCCs are offshore or nearshore facilities established by organizations to handle core business functions such as IT, analytics, customer support, and process management. Unlike traditional outsourcing, GCCs are fully owned and controlled by the parent company, ensuring alignment with strategic goals, data security, and quality standards. For MGAs, GCCs provide:
- 24/7 Operational Continuity: Time zone differences allow MGAs to offer round-the-clock service.
- Access to Specialized Talent: From actuarial analysts to AI engineers and trained insurance ops staff.
- Cost-Efficiency: Savings of 40–60% compared to onshore hiring.
- Faster Go-to-Market: Parallel operations and quicker product builds.
- Operational Redundancy & Risk Diversification
By integrating GCCs into their operating model, MGAs can streamline processes, reduce costs, and focus on core activities like product innovation and market expansion.
Who Should Consider a GCC?
While Global Capability Centre’s (GCCs) offer clear advantages, they’re not a one-size-fits-all solution. The decision to establish a GCC should align with an MGA’s scale, strategic ambitions, and operational complexity
Below are key indicators that suggest when an MGA is ready to leverage a GCC:
1. Post- Funding and Scaling Phase
MGAs that have recently secured a Series A, B, or later round of funding often face pressure to scale quickly, both in terms of headcount and product offerings.
2. Multi-Product or Multi-Region Strategy
An MGA offering a suite of products (e.g., commercial auto, cyber, pet, or home insurance) or expanding across states/countries faces growing back-office complexity. A centralized offshore team can streamline support across underwriting, claims, and compliance.
3. Tech-Driven or Digitally Native MGAs
Tech-savvy MGAs aiming to build proprietary platforms (for policy admin, quote-bind-issue, or customer self-service) can use a GCC to access skilled IT and data engineering talent that would otherwise be cost-prohibitive locally
Not Every MGA Needs a GCC — Yet
MGAs still in early-stage experimentation or those with a single niche product and limited market presence might not need a GCC initially. For these, a hybrid model—outsourcing or working with a shared services vendor—could suffice until scale demands more dedicated infrastructure.
The Real-Life Success Stories
Here’s a closer look at the real-life success stories:
JAB Holding Company: A Case Study in Scalable Operations
A prime example of building a scalable operation in the insurance sector is JAB Holding Company’s creation of Independence Pet Holdings (IPH), a conglomerate that has become a global leader in pet insurance and health services. JAB, a private equity giant behind brands like Krispy Kreme, recognized the pet insurance market’s 20% annual growth and low U.S. penetration (under 3%). Since 2021, it has built IPH into a global powerhouse through strategic acquisitions and operational consolidation.
Building Independence Pet Holdings
JAB’s approach to creating IPH demonstrates how a well-funded entity can consolidate and scale operations, a model MGAs can emulate with GCCs. Here’s how JAB executed its strategy:
1. Acquiring a Portfolio:
- JAB acquired leading pet insurance brands, including Embrace, Pumpkin, Figo, ASPCA, Spot, Pets Best, and AKC Pet Insurance. Key deals include the $265 million purchase of Independence Holding Company’s pet insurance arm (2021), the $1.4 billion acquisition of Fairfax Financial pet operations (2022), and the $1.5 billion acquisition of Embrace (2023).
- By 2023, IPH insured over 3.3 million pets, with $1.5 billion in gross written premiums, projected to hit $2 billion by 2024
2. Centralizing Operations:
JAB didn’t just acquire brands; it built a comprehensive ecosystem under IPH, including:
Underwriting
IAIC provides risk management, actuarial services, and underwriting for IPH’s brands and third-party partners.
Technology and Services
IPH owns Pethealth, which operates the 24Petwatch Registry (20 million registered pets) and provides lost pet recovery and adoption solutions. Figo’s mobile-friendly Pet Cloud enhances customer engagement.
Customer Support
IPH centralizes customer service and claims processing for its brands, ensuring consistency and efficiency.
This full-stack model mirrors what GCCs can do for MGAs, consolidating back-office functions to support multiple brands or products.
3. Global Expansion:
- JAB extended its pet insurance portfolio beyond North America, acquiring UK and European brands like Animal Friends, Assur O’Poil, and Pinnacle Pet Group, which operates AGILA and HD Assurances.
- By 2023, JAB’s platform insured over 3.3 million pets, with gross written premiums of $1.5 billion, projected to reach $2 billion by 2024.
How Can MGAs Harness GCCs?
To scale like JAB, MGAs can integrate GCCs into their strategy:
1. Set Up a GCC:
Establish a center in a talent-rich, cost-effective region like Bangalore or Manila. For example, a GCC could handle underwriting for multiple MGA products, mirroring IAIC’s role.
2. Leverage Technology:
Use GCCs to build platforms like Figo’s Pet Cloud, enhancing customer engagement and analytics.
3. Enable 24/7 Support:
Provide round-the-clock customer service, reducing response times, as IPH does for its brands.
4. Ensure Compliance:
GCC teams can manage regulatory requirements, supporting expansion into new regions, like JAB’s European ventures.
5. Scale Post-Funding:
Post-funding, use the GCC to quickly onboard new teams or integrate acquired entities, avoiding the delays of local hiring.
Challenges and Mitigation Strategies
While GCCs offer immense benefits, MGAs must address potential challenges:
Cultural Alignment: Ensure the GCC’s teams align with the MGA’s values and goals through regular training and communication.
Data Security: Implement robust cybersecurity measures to protect sensitive customer data, complying with regulations like GDPR or NAIC standards.
Integration Costs: Initial setup costs for a GCC can be high. Mitigate this by starting with a small, focused team and scaling gradually as ROI becomes evident.
Conclusion: Think Like a Conglomerate, Operate Like a Startup
JAB Holdings’ centralized approach with Independence Pet Group showcases the efficiency of integrating top brands, an underwriting carrier, and shared services. Funded MGAs need smart infrastructure, not just capital. Global Capability Centers (GCCs) enable MGAs to scale quickly, reduce costs, and improve service quality by offshoring key functions. In today’s market, GCCs are essential for sustainable growth and transforming ambition into reality.
