These are anonymized real-world examples from MGA operations. Learn from others' mistakes to avoid costly technology failures.
The Case of the Lost Bordereaux
The Problem: A mid-sized MGA implemented a new PAS system but failed to properly test bordereaux generation. During the first month-end close, the system generated incomplete bordereaux files missing critical claim data.
The Impact:
- Lloyd's managing agent rejected the bordereaux
- Delayed settlement by 6 weeks
- Manual data extraction required 200+ hours
- Regulatory compliance issues
The Lesson: Always test bordereaux generation with real data before going live. Validate against Lloyd's V5.2 requirements. Have a rollback plan.
How to Avoid: Use a PAS platform with built-in bordereaux validation. Test with sample data matching your actual portfolio structure.
The API That Cost $50,000
The Problem: An MGA integrated their PAS with a third-party rating engine via API. The integration worked, but the API had a bug that caused duplicate premium calculations. Every policy was charged twice.
The Impact:
- Overcharged 1,200 policies
- $50,000 in premium refunds
- Customer trust damaged
- 3 months to reconcile accounts
The Lesson: Always implement idempotency checks in API integrations. Validate data before and after API calls. Monitor for anomalies.
How to Avoid: Use platforms with built-in API error handling and validation. Implement transaction logging and reconciliation processes.
The Referral Trigger That Never Fired
The Problem: An MGA configured referral triggers in their PAS, but a logic error meant high-value risks were auto-bound without referral. The system bound policies exceeding $500K without carrier approval.
The Impact:
- 15 policies bound outside authority
- Binder agreement violation
- Carrier relationship strained
- Potential E&O exposure
The Lesson: Test referral logic with edge cases. Validate triggers work in both directions (high and low). Implement audit trails.
How to Avoid: Use a PAS with visual workflow builders that make logic errors obvious. Test with real-world scenarios before launch.
The Data Migration Disaster
The Problem: An MGA migrated from spreadsheets to a PAS system. The migration script failed silently, leaving 30% of policies with incorrect data. Premium amounts, limits, and dates were corrupted.
The Impact:
- 2,000 policies with data errors
- 6 months to manually correct
- Reporting accuracy compromised
- Regulatory reporting delays
The Lesson: Always validate migrated data. Run parallel systems during transition. Have data reconciliation processes.
How to Avoid: Use platforms with built-in data validation and migration tools. Perform test migrations with sample data first.
The Aggregate Limit Breach
The Problem: An MGA's PAS didn't track aggregate limits in real-time. The system continued binding policies even after reaching the aggregate limit, exposing the carrier to unlimited liability.
The Impact:
- $2M in excess exposure
- Reinsurance coverage gaps
- Emergency binder suspension
- Reputational damage
The Lesson: Real-time aggregate tracking is non-negotiable. Set up alerts before reaching limits. Monitor exposure continuously.
How to Avoid: Use a PAS with built-in aggregate limit monitoring and automatic binding restrictions. Set up dashboard alerts.
Key Takeaways
- Test Everything: Don't assume integrations work. Test with real data.
- Validate Data: Implement validation at every step of the process.
- Monitor Continuously: Set up alerts for anomalies and limit breaches.
- Have Rollback Plans: Know how to revert changes if something goes wrong.
- Start Small: Pilot new systems with a subset of business before full rollout.
Want to avoid these pitfalls? Use our PAS Buyer's Checklist to evaluate platforms before implementation.