‘Market ripe for MGAs’ as premium hit fastest growth in years

The US P&C insurers that lean most notably on managing general agents (MGAs) and other delegated authorities may have seen premiums increase by 19% via such channels in 2021 to a record $60 billion, analysts at  AM Best have said in research.

Sums include premiums generated through delegated authorities as reported by carriers where such channels accounted for at least 5% of premiums overall. The larger MGA market need not move in lockstep, analysts noted.

It's a sizeable acceleration from recent years following growth of 6.0% in 2020, 8.7% in 2019 and 2.3% din 2018.

"By our estimates, the premium generated through the MGA market has doubled over the past decade," AM Best analysts wrote.

The list of utilising insurers is led by Philadelphia Indemnity at $3.6 billion, accounting for roughly 17% of the MGA-generated premium amongst the top 20 such insurers. Next on the list are Scottsdale at $2.2 billion, then ACE P&C, Universal P&C, each taking about 10% of premium amongst those top 20, then United Specialty and State National to round out the list of those taking above $1 billion.

Growth is likely in both MGAs affiliated with individual carriers and the independents who more freely take their business from one carrier to another, analysts claimed.

"Demand-side conditions make the market ripe for MGAs," analysts wrote. Those conditions focus on client awareness of a broadening array of specialised and evolving risks.

The specialist nature of those risks has also helped highlight MGA's upper hand in efficiency, including a more agile approach to new technology where cumbersome legacy systems don't need to be dragged along.

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