Counting on People: A Five-Point Underwriting Test for Key-Person Dependency in UK Specialist Teams

The intangible that walks out of the door

UK MGAs have become more comfortable treating intangible exposures as underwriting subjects rather than legal abstractions. Data assets, intellectual property and contractual liabilities now appear in submission packs, wordings and portfolio reviews. Human capital has not followed at the same pace. Key-person dependency is still frequently delegated to human resources, succession planning or a general management discussion, even where the delegated authority, technical pricing or claims philosophy of a specialist team depends on a small number of individuals.

That gap matters in 2026. Specialist underwriting and claims teams are lean, technically specialised and often built around a handful of recognised experts. The loss of one underwriter, claims handler or technical lead may not produce a physical damage event, but it can interrupt binding authority, delay claims decisions, weaken broker relationships and create conduct risk. For an MGA, the exposure is not simply the cost of recruitment. It is the cost of lost momentum, impaired decision-making and, in some cases, regulatory or contractual breach.

Why key-person risk belongs in underwriting

Key-person risk is often confused with business continuity planning. The two overlap, but they are not the same. A continuity plan may keep the office open; it will not necessarily preserve the judgement, relationships and delegated authority that sit with a named individual. In specialist lines, the underwriting file should show where authority is concentrated, how easily it can be transferred and what happens when it cannot be.

The underwriting question is not whether a team is talented. It is whether the MGA can demonstrate that talent is not a single point of failure. That requires evidence rather than assurance, and it requires a framework that can be applied consistently across submissions.

1. How concentrated is decision-making?

The first question is not whether a team is small, but where authority sits. An MGA should ask for the authority matrix, not just the organisation chart. Which individuals can bind risk, approve claims, sign off wording changes or speak for the MGA to regulators and brokers? What is the ratio of named-person authority to the total number of authorised signatories? Is there a documented deputy for each critical function?

A simple absence test is revealing: if a named individual were unavailable for four weeks, which decisions would stop and which would merely slow? The answer should be tested against claims authority, pricing referrals and broker communications. A team that relies on one technical lead for every complex referral may be more exposed than its headcount suggests.

2. Are non-compete and notice arrangements effective?

The second question concerns contractual protection. Notice periods, garden leave and restrictive covenants are often assumed to be stronger than they are. UK courts test restrictive covenants for reasonableness in scope, geography and duration, and an unenforceable clause provides little comfort.

Underwriters should ask whether key individuals have current contracts, whether non-compete and non-solicitation terms are enforceable, how long notice periods run, and whether confidential information and client relationships are adequately protected. The answers should be evidenced, not asserted. A summary of contract terms, reviewed by the MGA's legal advisers, is more useful than a representation that key staff are 'tied in'.

3. What continuity cover exists?

The third question is continuity. Continuity cover is sometimes treated as a remedy for physical damage or IT failure; it should also be tested against people. What playbooks exist for claims handling, pricing referrals and broker communication if a key person is absent? Is there dual sign-off for material decisions? Are external consultants or a panel of retired practitioners available?

If insurance is proposed as a solution, the wording must be clear about whether key-person events are affirmative, excluded or simply silent. Silent cover is not a strategy. A key-person continuity product may be useful where the trigger and valuation method are well defined, but it should not be used to avoid asking the underlying operational questions.

4. Is the talent pipeline credible?

The fourth question examines retention. Key-person risk is not only about sudden departure; it is also about attrition, burnout and succession. Underwriters can ask for staff turnover data for specialist teams, remuneration benchmarking, equity or long-term incentive arrangements, and evidence of succession planning.

In a tight market for experienced underwriters and claims specialists, a team that has not recruited below the senior level for several years may be more fragile than its headcount suggests. The same applies to teams where technical knowledge has not been documented because the senior practitioner has always handled it personally.

5. What are the claims and conduct consequences?

The fifth question connects people to outcomes. What happens to claims accuracy, complaint volumes and regulatory notifications when a technical lead is absent? Are there quality assurance processes that do not depend on one individual? Has the MGA modelled the cost of backlogs, outsourced handling or temporary cover?

This is where human capital becomes an underwriting number rather than a management concern. A claims backlog may be costly, but a pattern of inaccurate decisions or missed regulatory notifications can be more damaging. The underwriting file should reflect both.

From questionnaire to wording

A five-question framework will not eliminate key-person risk, but it makes the exposure visible. Evidence can be drawn from authority matrices, organisation charts, contract summaries, turnover data, training records, broker interviews and claims quality reviews. The MGA should record which answers are verified, which are asserted and which remain unknown.

Underwriting treatment should follow the evidence. Where dependency is high, options include tighter conditions, monitoring requirements, limits for continuity-related costs or clearer exclusions where key-person events are not intended to be covered. The important point is that the treatment is deliberate. Human capital is a measurable intangible exposure, and in specialist teams it deserves the same discipline as any other accumulation of risk.